RBS 'lost more than any other bank in the world'

Jun 25 2009 by Iain Laing, The Journal

PART-NATIONALISED Royal Bank of Scotland lost more money than any other bank in the world last year, according to a leading industry journal.

RBS’s overall losses of £36bn during a disastrous 2008 put it at the top of a list compiled by The Banker magazine, ahead of ailing US giant Citigroup.

The bank is now 70%-owned by the taxpayer and in the process of shedding tens of thousands of jobs.

RBS came under more fire this week after details emerged of a £9.6m pay and shares package for new chief executive Stephen Hester, who is charged with turning around the ailing business.

RBS was sent plunging to its UK record losses by a mammoth write-down on its acquisition of Dutch rival ABN Amro at the top of the market in 2007, as well as soaring bad debts. The bank’s overall statutory losses stood at £40.7bn in February, but this now stands at £36bn due to conversion effects from the US dollar.

Former chief executive Sir Fred Goodwin, who oversaw the bank’s ill-fated expansion programme, agreed last week to give up part of his controversial £703,000 annual pension.

HBOS – the bank which lost almost £11bn last year and had to be rescued from nationalisation through a takeover by Lloyds TSB – is sixth on the list of losses.

US investment bank JP Morgan topped the list of the world’s strongest banks by tier one capital – a key measure of their financial strength.

On this measure, HSBC was third overall – but also the highest-ranked bank not to receive any kind of state aid. HSBC’s pre-tax profits slid to £6.5bn in 2008 but it called on investors for a UK record £12.5bn in a rights issue earlier this year to strengthen its finances.