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Impairment charges at RBS drop to £2.2bn 5 August 2011

RBS was forced to make a £733m provision due to Greek government bonds, and a further £850m provision for refund claims over mis-sold payment protection insurance (PPI), although impairment charges across the group fell to £2.26bn for the second quarter of 2011.

Total impairments for the bank in the first half, at £4.2bn, were 18 per cent lower than the prior half year.

The bank’s results statement, published this morning, also shows that the group will be cutting about 2,000 jobs during the next 18 months.

RBS chief executive Stephen Hester said: “There is no shortcut to achieving our goals. We seek excellence in support of customers; a strong risk profile with the past accounted for; and the improved shareholder returns important to all. This is our focus.

“Economic and regulatory headwinds may be challenging but the momentum that our people and restructuring actions have sustained thus far in the RBS recovery plan should continue to stand us in good stead.”

In terms of its exposure to sectors, the bank suffered £51m of losses on property loans, £13m of losses via hotels and restaurant loans and £15m losses via house building and construction loans in the first half of 2011. £269m of losses were accounted through its Ulster Bank subsidiary.

Mortgage impairment losses were £55m on a book of £94bn, a £6m reduction in the second quarter compared to the first. 

RBS provided a total of £44.2bn of new lending to UK business customers. This comprised £16.7bn of gross new loans and facilities to mid and large corporates, £7.2 bn of mid-corporate overdraft renewals, £15.5 bn of gross new loans and facilities to SMEs and £4.8bn of SME overdraft renewals.

The group added that demand for credit from SMEs remains well below pre-crisis levels. Its independent SME Finance Monitor survey showed that 81 per cent of SMEs had no plans to borrow in the following three months.

Only two per cent of SMEs cited lack of external finance as the main obstacle to running their business over the same time period.

 

 

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