RBS swings to a loss after £900m PPI hit

Royal Bank of Scotland has tumbled to a loss in the third quarter after taking a £900 million hit for payment protection insurance (PPI) claims.

The part-nationalised lender reported pre-tax operating losses of £8 million for the three months to September 30, down from £961 million a year ago.

It posted attributable losses of £315 million, against profits of £448 million a year earlier.

RBS – still 62% owned by the Government – blamed losses on the £900 million bill for PPI following a last-minute surge in claims ahead of the August 29 deadline, as well as a “particularly challenging” quarter for its investment banking arm.

Ross McEwan
Ross McEwan (Andrew Milligan/PA)

Despite the third-quarter losses, RBS said it remained on track for full-year expectations in “uncertain times”.

The group said operating profits stood at £2.7 billion for the nine months of the year so far, down slightly on the £2.8 billion reported a year ago.

The figures mark the last for boss Ross McEwan before he hands over to the lending giant’s first female chief executive.

Mr McEwan leaves on October 31, paving the way for Alison Rose to make history as the first woman to run one of Britain’s biggest high street banks.

Chief financial officer Katie Murray said: “These results demonstrate our solid underlying performance in a tough operating environment.

“We have seen strong growth across the business and our sustained high levels of capital and liquidity mean we are well positioned to support our customers in these uncertain times.”

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