RBS plunges into red as buffer billions broached
Nov 7 2009 by Iain Laing, The Journal
He added: “Economic recovery is likely to be slow and the pain of economic adjustment will take years to subside. Our business will reflect these issues.
“Profitability in our core businesses will recover fully only when our own actions are also complemented by more normal interest rates and bad debt experience.”
At the operating level, the bank’s losses were less than the second quarter of this year, due to the non-core parts of the business, where losses shrank from £4.98bn to £2.72bn.
The bank, which owns NatWest, added that retail banking profits in the UK, Ireland and the US remained subdued with deposit margins under pressure due to record low interest rates.
The bank’s cost-cutting programme has also delivered further efficiencies but RBS warned of more job losses as it adapts to changed market realities.
RBS announced another 3,700 job losses this week and Mr Hester said the group was more than halfway through its major restructuring programme.
The company lent £15.2bn to businesses under loan commitments during the third quarter, although demand for lending is muted.
RBS is being forced to sell off its Churchill and Direct Line insurance business, more than 300 Williams & Glyn’s branches and parts of its investment banking business in return for state support.
Economic recovery is likely to be slow and pain of economic adjustment will take years to subside
