Royal Bank of Scotland reports massive half-yearly profit slump
Submitted by Marina Dimova on Fri, 08/08/2008 - 08:57.
Britain's Royal Bank of Scotland (RBS) Friday reported a pre-tax loss of 691 million pounds (1.38 billion dollars) in the first six months of 2008 which experts said was one of the biggest losses in British banking history.
RBS, Britain's second-largest bank, said it was hit by writedowns of 5.9 billion pounds bn of write-downs after the credit crunch cut the value of many of its mortgages and assets.
RBS, which led a consortium taking over Dutch bank ABN Amro last year, had registered a profit of 5 billion pounds in the first six months of 2007 - the comparable period for Friday figure.
Analysts said much of the writedown total stems from investments at ABN Amro. But like other banks, RBS had suffered from a drop in the value of risky assets and securities, particularly those linked to US subprime mortgages.
RBS became the first British bank to seek financial backing from shareholders through a rights issue earlier this year.
Its sale of shares worth 12 billion pounds and met with overwhelming support from shareholders.
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