Britain's state-rescued Royal Bank of Scotland said Thursday it sank into a first-quarter net loss on vast provisions for restructuring and legacy costs linked to its past conduct. RBS, about 80-percent owned by the government after a 2008 bailout, said losses after taxation stood at £446 million ($688 million, 619 million euros) in the three months to the end of March. That contrasted with a net profit of £1.195 billion in the same period a year earlier, it added in a results statement.
The bank set aside £453 million for restructuring costs, mainly relating to a writedown in the value of its US premises. And it took £856 million of "litigation and conduct" charges, which related to "foreign exchange and mortgage-backed securities litigation in the United States together with other customer redress." That provision included a £334 million charge for foreign exchange investigations and litigation, and another £100 million to compensate customers who were mis-sold payment protection insurance (PPI).
Adjusted operating profit, stripping out the charges and other one-off items, rose 16 percent in the reporting period to £1.63 billion as RBS benefited from "generally benign credit conditions," cost-cutting and improving bad debts.
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