RBS doubles quarterly net loss to $1.9b after dividend payment to government

The Royal Bank of Scotland Group reported a wider net loss of £968 million (S$1.9 billion) in the first quarter.
The Royal Bank of Scotland Group reported a wider net loss of £968 million (S$1.9 billion) in the first quarter.PHOTO: REUTERS

LONDON (BLOOMBERG) - Royal Bank of Scotland Group, Britain's largest taxpayer-owned lender, posted a deeper loss in the first quarter as it paid for some of the government support it received during the financial crisis.

The net loss widened to £968 million (S$1.9 billion) from £459 million a year ago, the lender said in a statement on Friday (April 29). That's bigger than the £957 million loss average estimate of 10 analysts in a company compiled survey.

RBS cast further doubt over its plans to resume dividends after warning on Thursday of a "significant risk" it would miss a European Union deadline to separate its Williams & Glyn unit by the end of 2017. Disposing of the consumer division is among a series of roadblocks to the first payout after RBS required a £45.5 billion UK government bailout in the financial crisis. It's also awaiting a settlement with US authorities over the sale of mortgage-backed securities.

"We continue to deal with a range of uncertainties in the external environment, not least those caused by the forthcoming referendum on the UK's continuing membership of the European Union," the bank said in the statement.

The stock has fallen about 19 per cent this year in London and is the second-worst performing major British lenders behind Barclays. RBS trades below the 407 pence a share at which the government says it would break even on its 2008 and 2009 rescue.

RBS paid £1.2 billion to the UK Treasury in March to scrap the so-called dividend access share, which was installed as part of its bailout conditions to give the state rights to a preferential dividend. The move was viewed at the time as a step toward the resumption of dividends as early as 2017.

The bank, which is 73 per cent government-owned, posted its eighth consecutive annual loss in February, battered by costs for past misconduct.