The bailed-out bank achieved a profit of Â£1.15 billion for the previous quarter, but provisions for bad debt were largely responsible for the slip back into the red.
However, RBS reported third-quarter group operating profits of Â£726 million and chief executive Stephen Hester said the bank is becoming "safer, stronger and more resilient".
He claimed charges on the balance sheet, such as the Â£825 million fee for use of the government's toxic asset protection scheme, should not obscure the fact that conditions are improving at the institution.
Mr Hester added: "As we focus on serving customers better, profitability is also improving and rebalancing towards a more sustainable mix of business contributions."
RBS is 84 per cent owned by the taxpayer after the government bought 90.6 billion shares at an average of 50.2 pence each.
By Tony Aynsley