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| Version 3 | Version 4 |
|---|---|
| RBS reports record corporate loss | RBS reports record corporate loss |
| (20 minutes later) | |
| Royal Bank of Scotland (RBS) has announced the largest annual loss in UK corporate history. | Royal Bank of Scotland (RBS) has announced the largest annual loss in UK corporate history. |
| RBS, which had to be bailed out by the government last year, said that its 2008 loss totalled £24.1bn (£34.2bn). | |
| It also said it would put £325bn of toxic assets into a scheme that offers insurance for any future losses. | It also said it would put £325bn of toxic assets into a scheme that offers insurance for any future losses. |
| The Asset Protection Scheme, backed by taxpayers, aims to strengthen bank balance sheets and encourage banks to lend more to firms and individuals. | The Asset Protection Scheme, backed by taxpayers, aims to strengthen bank balance sheets and encourage banks to lend more to firms and individuals. |
| Chairman Philip Hampton blamed the massive loss on the "unprecedented turbulence" in financial markets and deteriorating conditions around the world. | Chairman Philip Hampton blamed the massive loss on the "unprecedented turbulence" in financial markets and deteriorating conditions around the world. |
| "We owe our continued independence to the UK government and taxpayers and are very thankful for their support," he said. | "We owe our continued independence to the UK government and taxpayers and are very thankful for their support," he said. |
| He warned that 2009 would be another tough year. | He warned that 2009 would be another tough year. |
| The bulk of the losses came as RBS made a £16.2bn write-down on poorly performing assets, mainly resulting from its 2007 takeover of ABN Amro at the height of the boom. | |
| It said underlying losses totalled £7.9bn. | It said underlying losses totalled £7.9bn. |
| 'Increased certainty' | 'Increased certainty' |
| RBS will pay £6.5bn to the Treasury to take part in the Asset Protection Scheme, which will be funded by issuing new shares. We are extremely frustrated by the lack of clarity over the company's restructuring proposals Derek Simpson, Unite's joint general secretary Huge pension for former RBS boss | RBS will pay £6.5bn to the Treasury to take part in the Asset Protection Scheme, which will be funded by issuing new shares. We are extremely frustrated by the lack of clarity over the company's restructuring proposals Derek Simpson, Unite's joint general secretary Huge pension for former RBS boss |
| It said it would liable for the first £19.5bn in losses on the assets insured as part of the scheme. | It said it would liable for the first £19.5bn in losses on the assets insured as part of the scheme. |
| "Participation in this scheme would assist us in reducing risk for shareholders whilst providing greater support for UK customers via increased lending," said RBS chief executive Stephen Hester. | "Participation in this scheme would assist us in reducing risk for shareholders whilst providing greater support for UK customers via increased lending," said RBS chief executive Stephen Hester. |
| "It would provide increased certainty to the market by limiting potential losses on a significant proportion of our balance sheet." | "It would provide increased certainty to the market by limiting potential losses on a significant proportion of our balance sheet." |
| Lloyds Banking Group is also expected to take part in the scheme, which could see taxpayers guaranteeing up to £600bn worth of toxic debt. | Lloyds Banking Group is also expected to take part in the scheme, which could see taxpayers guaranteeing up to £600bn worth of toxic debt. |
| Shake-up | Shake-up |
| Mr Hester also announced a "sweeping" shake-up of the group's business as it aims to cut costs by £2.5bn a year. | |
| He said that the bank would be separated into two arms, with the bank's riskier assets and operations grouped together. | He said that the bank would be separated into two arms, with the bank's riskier assets and operations grouped together. |
| The bank's overseas business would be cut back, with its operations to be reduced or sold in 36 of the 54 countries it works in. | The bank's overseas business would be cut back, with its operations to be reduced or sold in 36 of the 54 countries it works in. |
| However, he gave few details on expected job losses, angering union representatives. | |
| Reports had suggested job losses could total 20,000. | Reports had suggested job losses could total 20,000. |
| "We are extremely frustrated by the lack of clarity over the company's restructuring proposals with no firm detail on jobs," said Unite's joint general secretary, Derek Simpson | "We are extremely frustrated by the lack of clarity over the company's restructuring proposals with no firm detail on jobs," said Unite's joint general secretary, Derek Simpson |
| "The uncertainty hanging over the heads of these workers is unacceptable." | "The uncertainty hanging over the heads of these workers is unacceptable." |