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British bank RBS reports loss

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[August 05, 2011]  LONDON (AP) -- Royal Bank of Scotland Group PLC reported a second-quarter loss Friday after it wrote down the value of its Greek bond holdings by 733 million pounds ($841.5 million).

The bank said it posted a net loss of 897 million pounds, compared with a profit of 257 million pounds in the same period last year. It also set aside a previously announced 850 million pound charge for customers who were missold payment protection insurance on mortgages and other loans.

RBS, which is 83 percent owned by the British taxpayer, has hundreds of millions of pounds of exposure to Greek debt, making it vulnerable to the country's ongoing crisis. Many of those losses are tied to its acquisition of Dutch bank ABN Amro.

The bank's chief executive, Stephen Hester, told the BBC that RBS's restructuring was going well.

"We are getting risk down, the bad assets -- that have been dogging us from past years -- are coming down, and I feel comfortable with the way that part of the RBS plan is unfolding."

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But he added that market turmoil of the past 24 hours has showed that economic downturn was "not a banking crisis" but "one of global economic imbalances."

"The root of what's going on and the nervousness hitting markets again is really about how we manage our economies both globally and individually," he said. "It is certainly a worrying time."

[Associated Press]

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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