Part of the headquarters building of the Royal Bank of Scotland in London, Monday Nov. 2, 2009, one of the banks which were rescued by government action following the recent worldwide collapse of the financial sector. RBS Group PLC said Monday that the European Commission will require the sale of more assets than the bank originally expected, while gaving no details about what parts of its business it might be forced to sell, as negotiations continue between RBS, the British Treasury and the European Commission. (AP Photo/Lefteris Pitarakis)
LEFTERIS PITARAKIS
Government-controlled Royal Bank of Scotland Group PLC on Friday reported a net loss of 1.8 billion pounds ($3 billion) despite an improvement in underlying profits and said lending to small- and medium-sized companies increased 5 percent.
Full recovery from its near collapse a year ago will take years, its chief executive Stephen Hester said.
For the three months ending Sept. 30, RBS reported total income of 7.1 billion pounds, compared to 8.6 billion pounds a year earlier.
The bank booked impairment losses of 3.3 billion pounds, up from 1.3 billion a year earlier. Impairments for the first three quarters of this year rose to 10.8 billion pounds.
Without those charges, operating profit rose 55 percent to 1.75 billion pounds.
RBS shares were up 1.9 percent at 35.87 pence on the London Stock Exchange.
Hester said the results affirmed his confidence that RBS can recover as a strong company.
"The results also show the headwinds we face and the legacy we are purposefully working out of," he said. "As I have repeatedly said, the journey will take some years."
RBS announced earlier this week that it had agreed terms for joining the government Asset Protection Scheme to guard against losses of up to 282 billion pounds on toxic assets. That move will boost the government's stake from 70 percent to 84 percent.
The agreement calls for RBS to dispose of 318 branches, or 14 percent of its British network, within four years.
The bank said it was meeting commitments demanded by the government to increase lending.
Gross lending so far this year totals 13.9 billion pounds including more than 2.3 billion pounds to first-time buyers. Gross lending was up 23 percent in the third quarter compared to the previous three months, RBS said.
Gross lending to business this year amounted to 45.5 billion pounds, though third-quarter lending of 15.2 billion was down 2 percent from the previous quarter.
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On the Net: http://www.rbs.com
Posted in Business on Friday, November 6, 2009 5:00 am Updated: 7:05 am.
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