RBS reports £1.4 billion pre-tax loss in third quarter

The Royal Bank of Scotland (RBS) has reported a pre-tax loss of £1.4 billion in the three months to September.

The third quarter results are significantly down on the taxpayer-backed bank’s second quarter pre-tax profit of £1.2 billion.

RBS’s income for the third quarter was £7.9 billion, down slightly from £8.2 billion in the previous quarter.

Gross mortgage lending reached £5.3 billion in the third quarter and the bank says its acceptance rates remain at 90%. The group’s share of the mortgage market remained at 14%.

The bank has a Core Tier 1 capital ratio of 10.2%, significantly more than the 7% required under the new Basel III capital rules. (article continues below)

Group impairments were down 29%, from £1.1 billion to £782m in the second and third quarters respectively.

The group has a loan to deposit ratio of 126%, which it aims to reduce to 100% by 2013.

Stephen Hester, chief executive officer, says: “Our third quarter results demonstrate that we continue to make good progress in our recovery. We are delivering what we set out to achieve. The core bank is becoming stronger. As we focus on serving customers better, profitability is also improving and rebalancing towards a more sustainable mix of business contributions. At the same time, the legacy risks and losses in non-core are being worked out effectively and our ambitious restructuring efforts continue apace.”

He adds: “While economic challenges, especially interest rate-driven, and regulatory costs will impact the level of improvements targeted and their speed, RBS remains focused on achieving balanced progress across all our key objectives.”