RBS Posts Narrower-Than-Expected Net Loss for 2009 (Update2) Share Business ExchangeTwitterFacebook| Email | Print | A A A
By Andrew MacAskill and Jon Menon
Feb. 25 (Bloomberg) -- Royal Bank of Scotland Group Plc, Britain’s biggest government-controlled lender, reported a narrower-than-expected full-year net loss, and said impairments for bad loans are likely to have peaked.
RBS reported a net loss of 3.6 billion pounds ($5.5 billion), compared with a loss of 24.3 billion pounds a year earlier, the Edinburgh-based bank said today in a statement. That beat the 6.01 billion-pound estimate of nine analysts surveyed by Bloomberg.
Impairments “now appear likely to have peaked,” the company said in today’s statement. “The group is ahead of its targets on every published measure for this first year of the five-year plan.”
RBS, which needed 45.5 billion pounds in taxpayer-funded support, is undergoing the most complicated restructuring of any company in history, Hester said last month. The bank is selling assets and halting some activities such as leveraged finance after putting 282 billion pounds of assets into a government protection program that caps losses on toxic loans.
RBS today said impairments on bad debt rose “sharply” to 13.9 billion pounds. That almost matched the median estimate of 14.17 billion pounds of four analysts surveyed by Bloomberg.
Operating profit at RBS’s investment bank was 6.35 billion pounds compared with a loss of 1.27 billion pounds last year, the bank said.
Hester, 49, will waive his right to a bonus of 1.6 million pounds amid public anger over such payments after taxpayers bailed out the banking system. The bank said Hester had “significantly outperformed” his 2009 targets and that he would be rewarded “fairly, appropriately and at market levels.” Executives at Barclays Plc and Lloyds Banking Group Plc are also forgoing their bonuses.
RBS set aside 27 percent of revenue for pay and bonuses for investment bankers in 2009. Barclays Capital, the investment banking unit of Barclays Plc, paid 38 percent of revenue, while Goldman Sachs Group Inc. paid 36 percent.
RBS has fallen 37 percent in London trading since the end of August to yesterday, making it the worst-performer in the five-member FTSE 350 Banks Index, which has fallen 2.8 percent. RBS has a market value of 20.4 billion pounds.
Barclays, Britain’s second-largest bank, more than doubled second-half profit to 7.5 billion pounds when it reported results. Lloyds Banking Group Plc, Britain’s biggest mortgage lender, reports tomorrow and HSBC Holdings Plc on March 1.