RBS Confirms £1.2bn Loss After PPI Hit

RBS has confirmed it made a loss before tax of £1.2bn in the third quarter, compared with a profit of £2bn for the same period last year.

As revealed by Sky's City Editor, the bank has set aside a further £400m for the mis-selling of payment protection insurance (PPI), meaning the scandal has cost it £1.7bn to date.

The 82%-taxpayer owned bank also said it had taken a further hit of £50m to cover costs relating to the summer's massive IT failure - which saw many RBS, NatWest and Ulster Bank customers locked out of their accounts.

This takes its total bill for the meltdown to £175m.

RBS also said it expects to enter negotiations to settle investigations into Libor rate-fixing at the bank, incurring some financial penalties.

But the group's core banking operations - if the mis-selling and IT charges and stripped out - performed well, with operating profit for the three months hitting £1bn.

A decline in charges on bad debt helped boost performance at the bank, which said its restructuring would be complete in the next 18 months.

But the group's chief executive, Stephen Hester, said RBS needed to focus on improving its reputation. 

"The extraordinary challenges which RBS faced following the financial crisis are being worked through successfully," he said in a statement.

"The five year restructuring plan is now in its later stages with important work still to do, including an emphasis on dealing with reputational issues now that the bank's safety and soundness has advanced so well."

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