RBS posts £1.26bn loss for Q3 as PPI costs strike again

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Royal Bank of Scotland has posted a £1.26bn loss for the third quarter of 2012 after setting aside another £400m for PPI misselling.

The additional cover brings the firms total costs for PPI to £1.7bn.

The £1.26bn loss compares to the £2bn profit made by the firm in the third quarter of 2011. RBS’ has reported a core operating profit of £1.633bn, while group operating profits stood at just over £1bn.

RBS has also set aside a further £50m to cover the cost of the recent computer systems failure which locked many RBS, Natwest and Ulster Bank customers out of their accounts. The total cost for this now stands at £175m.

RBS has also confirmed that expects to face penalties for manipulating the rate of Libor.

It says: “The group expects to enter into negotiations to settle some of these investigations in the near term and believes the probable outcome is that it will incur financial penalties. It is not possible to estimate reliably what effect the outcome of these investigations, any regulatory findings and any related developments may have on the group, including the timing and amount of fines or settlements, which may be material.”

RBS chief executive Stephen Hester says: The extraordinary challenges which RBS faced following the financial crisis are being worked through successfully. The five year restructuring Plan is now in its later stages with important work still to do, including an emphasis on dealing with reputational issues now that the Bank’s safety and soundness has advanced so well. We passed two other important milestones in October with our exit from the Asset Protection Scheme and a very encouraging flotation of Direct Line Group and are within touching distance of matching every £1 of lending with a £1 of customer deposits.”