Royal Bank of Scotland, the owner of NatWest, has reported a pre-tax loss of £691m for the first half of 2008. It is the second biggest loss ever reported in banking history.
The banking group says it has been hit by credit write-downs of £5.9bn due to the credit crunch affecting the value of its mortgages and assets, with many from Dutch bank ABN Amro which it acquired last year. The historic loss compares with a £5bn profit for the same period last year.
RBS chief executive Sir Fred Goodwin says it has been a “chastening experience” and that the group “regret” the loss.
He adds that it has seen a “good performance” in the UK retail and commercial banking division with 12% growth in personal savings and 10% in mortgage balances. It has also seen growth in Asia, the Gulf and the US, despite the difficult conditions.
Goodwin says that with growth expected to slow across many countries, its priority is to position its businesses to make them supportive of their customers with operating with a “risk appetite appropriate to market conditions”.
It has been grim news across the financial services sector throughout the year with Lloyds TSB, Halifax and Alliance & Leicester reporting profit drops of 70%, 72% and 99% respectively.