RBS slides to £1.4 bn loss on Greece hit

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State-rescued Royal Bank of Scotland said Friday that it fell into a net loss of £1.4 billion in the first half of 2011 as it took a massive hit from exposure to the struggling Greek economy.

RBS, 83-percent owned by the government, announced that losses after tax stood at £1.425 billion ($2.32 billion, 1.64 billion euros) in the six months to June compared with a net profit of £9.0 million a year earlier.

The British lender was also hit by provisions set aside to compensate customers judged to have been mis-sold insurance policies.

RBS booked a loss of £897 million in the second quarter, or three months to June, due to a previously-announced £850 million charge for insurance claims and a £733 million provision related to Greek government bonds. RBS had record a net profit of £257 million in the second quarter of 2010.

"RBS's second quarter results show the group's restructuring momentum continues whilst core business performance is resilient in challenging market conditions," chief executive Stephen Hester said in a statement.

"There is no shortcut to achieving our goals ... Economic and regulatory headwinds may be challenging but the momentum that our people and restructuring actions have sustained thus far in the RBS recovery plan should continue to stand us in good stead," he added.

© 2011 AFP

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