Author: By Russell Lynch, Press Association
The operating loss was below second-quarter losses of £3.53 billion. Bad debts
remained high at £3.28 billion but around 30% below the April-June period,
the bank said.
Chief executive Stephen Hester said he was “upbeat, though realistic”
over the “tough job” ahead in restoring the bank’s fortunes.
On Tuesday RBS agreed a deal which will see up to £33.5 billion in taxpayer
funds pumped into the ailing bank, taking the public stake to 84%.
The bank said bad debts were “plateauing” but Mr Hester warned: “We owe it to
everyone to be realistic and transparent.”
He said: “Economic recovery is likely to be slow and the pain of economic
adjustment will take years to subside. Our business will reflect these
“Profitability in our core businesses will recover fully only when our own
actions are also complemented by more normal interest rates and bad debt
The narrowing losses came largely from the non-core parts of the business
already earmarked for sale. Operating losses shrank from £4.98 billion to
£2.72 billion, although it will take time to work through the bank’s
remaining credit market exposures.
The NatWest owner added that retail banking profits in the UK, Ireland and the
US remained “subdued” with deposit margins under pressure due to record low
The bank’s cost-cutting programme has also delivered further efficiencies but
RBS warned that this would mean more job losses on the way as it adapts to
“changed market realities”. The company announced another 3,700 job losses
The company lent £15.2 billion to businesses under loan commitments during the
third quarter, although demand for lending is “muted” and customers still
have access to £27 billion in undrawn facilities.
RBS is placing £282 billion in toxic debts into a taxpayer-backed insurance
scheme but is being forced to sell off its Churchill and Direct Line
insurance business, more than 300 branches and parts of its investment
banking business in return for state support.
The businesses on the block generated around £1.1 billion in operating profits
for RBS last year.
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