RBS posts £24.1 billion loss
by Gill Montia
Story link: RBS posts £24.1 billion loss
Royal Bank of Scotland (RBS) has reported a £24.1 billion loss for 2008, stealing a place in the record books for the largest annual loss in UK corporate history.
The bank, which is 68% state-owned, has also lined up £325 billion of bad loans and investments for the Government’s Asset Protection Scheme, full details of which are expected this week.
The facility could clean up the balance sheets of RBS and the new Lloyds Banking Group, by providing guarantees for the banks’ toxic assets, in return for a fee.
Speaking on BBC Radio 4’s “Today” programme RBS chief executive, Stephen Hester, confirmed that in return for the guarantees, the bank will be legally bound to increase its lending to individuals and businesses by £25 billion over the next 12 months.
He also warned of substantial job losses as the group embarks upon cost reduction measures; analysts have put the figure as high as 20,000 worldwide and 10,000 in the UK.
Mr Hester declined to comment on reports that disgraced former RBS chief executive, Sir Fred Goodwin, is currently drawing an annual pension of £650,000 under the terms of his departure from the troubled bank.
