RBS: Taxpayer-backed bank reports

6th May 2011

The bank, of which 83% is owned by taxpayers, reported a pre-tax loss of £116m, compared with £5m during the same quarter last year.

On FT.com RBS's operating profits are reported as being £1.1bn in the first three months of 2011, up from £882m a year ago.

The Guardian added that the cost of compensating customers who were mis-sold payment protection insurance would impact on the bank's business as the bailed out bank reported a loss for the first quarter of 2010.

The day after RBS reported that Lloyds Banking Group took a larger than expected £3.2bn provision to tackle PPI, RBS said it was "unable reliably to estimate any potential financial liability, although it could prove to be material".

The bank could face a £1bn charge for PPI in the second quarter of 2011, according to Ian Gordon, analyst at Exane BNP Paribas.

The Telegraph  speculates that Stephen Hester, chief executive of RBS, will likely be questioned in depth when he speaks later on the bank's own exposure to PPI compensation claims, with some analysts estimating the bank could face claims of as much £1.6bn resulting from its own misselling of the product.

Unlike Lloyds, RBS gave no estimate of potential PPI liabilities but said they could prove to be material.

More on protection insurance here.

Debate: Should UK adults be given shares in bailed out banks like RBS?

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