Royal Bank of Scotland Records Massive Loss -- Update

By Max Colchester 

LONDON-- Royal Bank of Scotland Group PLC said its net loss widened to GBP2.05 billion ($2.68 billion) in the first half of the year, hit by soaring litigation provisions and more restructuring costs, and sending the lender's shares down sharply.

The bank said Friday it made revenue of GBP6.1 billion in the period, down from GBP7.26 billion a year earlier. Its net loss figure widened from GBP179 million a year earlier, as the bank crept toward its ninth straight annual loss.

The bottom line was hit by a GBP1.32 billion provision to cover litigation-and-conduct costs, including an undisclosed amount to settle a lawsuit over allegations the bank didn't disclose its financial health ahead of an emergency capital raising in 2008.

RBS shares opened more than 5% lower on Friday.

The bank, which was subsequently bailed out and is now 73% government owned, also gave up on an expensive project to carve out and list its Williams & Glyn unit. The unit, which it has to dispose of by the end of 2017 to meet European state-aid rules, will instead be sold. Earlier this week, the bank received an offer from Banco Santander SA's U.K. business to buy the unit, according to people familiar with the offer.

RBS also took a GBP450 million charge for selling payment-protection insurance products. Restructuring charges totaled GBP630 million in the half. Adjusted operating profit, which strips out provisions and restructuring costs, was GBP2 billion.

Write to Max Colchester at [e-mail]

(END) Dow Jones Newswires

August 05, 2016 03:28 ET (07:28 GMT)

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