Royal Bank of Scotland said yesterday that its net loss more than doubled to £528 million (€594 million) in the first quarter as the state-rescued bank was hit by large charges.
The loss after tax for the three months to March 31 compared with a net loss of £248 million in the first quarter of 2010, RBS said in an earnings statement.
RBS is 83 per cent owned by the British government after a state bail-out triggered by the 2008 global financial crisis.
It said yesterday that the net loss came after RBS was hit by a charge of £469 million linked to the government ’s Asset Protection Scheme, or insurance scheme set against risky assets. However the bank’s underlying performance showed an improvement, with operating profit rising 19 per cent to £1.05 billion in the first quarter of 2011.
“RBS first quarter results show progress continuing,” the bank’s chief executive Stephen Hester said in the earnings statement.
“We are strongly focused on serving customers well while building capabilities to improve further. Financial strength and resilience continue to show sharp improvement as core business profitability broadens and non-core risks are reduced.
“This recovery is also allowing us to absorb higher Irish impairments and substantially increased regulatory demands, and to self-fund other ‘bills from the past’ such as restructuring, disposals and the cost of APS support,” Mr Hester added.
Shares in RBS were up three per cent at 41.73 pence in early trading on London’s benchmark FTSE 100 index, which was down slightly. “Given the headwinds of increasing Irish impairments, APS repayments and a revaluation of its own debt, the update actually implies some improving prospects for the beleaguered bank,” said Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers.
“In all, there are some signs that the recovery continues at RBS, even if numerous and significant hurdles remain. The share price performance has reflected this plethora of risks, having dropped 20 per cent over the last year as compared to a 13 per cent gain for the wider FTSE 100,” he added.