RBS sees bad debts triple

RBS debts triple

RBS, now 84 percent owned by the UK taxpayer, hit a GBP£1.5 billion operating loss for the third quarter as write-offs on bad debts nearly tripled. Now the massive losses have sparked concern for the future stability of the bank - and the taxpayer's funds.

Having recieved an additional GBP£33.5 billion in state funding this week, RBS has now seen the 70 percent government stake in the firm rise to 84 percent. However, the fledgling bank did stress that operating losses had improved from the GBP£3.5 billion recorded in the second quarter of this year, with shares going up by 1.3 percent to 35.7 pence.

Into the red

Nonetheless, despite the considerably better results compared to Q2, when compared with the same period from 12 months ago, today's results mark a significant fall back into the red. Back then, under the charge of disgraced banker Sir Fred Goodwin, the bank reported a GBP£2.3 billion profit.

Now though, the disappointing third-quarter results mark the end of something of a busy week for the firm, most notably with the largest bailout of any bank in the world having gone ahead. So far, RBS has been given GBP£53.5 billion in taxpayers' funding, and UK Chancellor Alistair Darling has now admitted that the additional GBP£33.5 billion outlined this week may still not be enough to save the bank.

Agreements

The European Commission has now reached an agreement with RBS that stipulates that, in return for state aid, the banking firm must sell off a number of its assets, essentially breaking-up the firm. RBS has now announced a further 3700 job cuts this week, on top of the 16,000 cuts the bank has already made public.

According to reports, the bank's chief executive Stephen Hester has admitted that the deal it made with Europe in return for state aid was "not what [RBS] wanted." Hester stressed that he had wanted to "keep hold of the bank's insurance business," but did now believe that the firm had "the tools to do our job."

Talking about the third-quarter reports, Hester stressed that "the results show the headwinds we face and the legacy we are purposefully working out of. As I have repeatedly said, the journey will take some years."

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