ECONOMY

RBS takes a hit on exposure to Greek debt

Royal Bank of Scotland slid to a pretax loss of 678 million pounds ($1.1 billion) in the second quarter, hit by losses on Greek government bonds and Irish customers still struggling to repay loans.

The loss compared with a profit of 1.17 billion pounds a year ago and came as impairments on bad loans rose to almost 2.3 billion pounds from 2 billion in the first quarter of this year but eased from 2.5 billion pounds a year earlier.

RBS wrote off 733 million pounds to cover anticipated losses on its 1.45 billion pound Greek bond portfolio.

It also said the impairment charge at its Ulster Bank operations in Ireland, where consumers are grappling with a housing market collapse, was 1.25 billion pounds, just 49 million pounds better than in the first quarter.

Earnings at RBS, 83 percent owned by the government after a bailout during the credit crisis, were also undermined by an 850 million pound provision to cover the costs of compensating customers mis-sold payment protection insurance by banks.

Overall that left RBS with an 897 million pound net loss, worse than the 424 million pounds forecast by analysts at WestLB and broadly in line with the 800 million predicted by brokerage Keefe, Bruyette