Royal Bank of Scotland today reported a pre-tax loss of £2 billion – its fourth consecutive loss since it was bailed out by the taxpayer in 2008.
The £2 billion loss for the full year to the end of December was a sizable increase from the pre-tax loss of £1.1 billion declared for the same period in 2010.
Total provision for defaults on loans across all sectors within the group’s “core” business increased to £9.1 billion from the £7.7 billion declared in last year’s results.
Loans and advances to customers classified as ‘core’ were down in every sector year on year, excluding loans in three sectors: Central and local government, Transport and Storage and Finance Leasing and Installment Credit.
Net loans made across all sectors were down from £404.8bn for the full year of 2010 to £386.3bn in 2011.
Despite some improvements in the business, the perilous state of RBS’s balance sheet remained clear to see, with the bank declaring £1.9 billion in non-investment grade collateralised debt obligations (lower than BBB- rated).
Residential Mortgage Backed Securities (RMBS) lower than investment grade were marked at £458m.
Derivatives sitting on the group’s balance sheet that have been marked “with a probability of default of 100%” were calculated at £1.58bn.
Employees at the group’s ‘Integration and Restructuring’ division were up by 800 staff year on year, with 1,100 staff working in the team as at 31 December 2011. This compares to just 300 in 31 December 2010.