RBS announce half year pre-tax loss of £1.5bn in wake of IT fiasco

Royal Bank of Scotland has announced a loss of £1.5bn for the first six months of the year following the breakdown of its IT systems in June.

The bank has set aside £125m to compensate its own customers as well as NatWest and Ulster Bank account holders who were unable to access their money for weeks.

The figure compares with a loss of £794m last year.

RBS, which is 82% owned by the Government, has also been hit by its role in two misselling scandals. Its bill for misselling Payment Protection Insurance (PPI) alone is forecast to grow by a further £130m to a total of £1.3bn.

The charges for compensating customers cap a difficult six months for the bank as it struggles to restore its battered reputation following its £45bn bail-out.

In the wake of the IT crisis chief executive Stephen Hester said he would forgo his 2012 bonus, worth up to £2.4m, in an attempt to quell anger.

RBS's operating figures are more positive, with the first three months of 2012 showing a profit of £1.1bn against a £144m loss over the same period last year.

The bank has paid back the last of the £163bn emergency loans taken during the financial crisis in the first half.

However, RBS Group is yet to withdraw from the Asset Protection Scheme (APS), under which taxpayers effectively insure its poorer-quality loans against future losses.

The Asset Protection Agency, which runs the scheme, said recently that it was preparing the way for RBS to exit before the end of the year. It is thought that leaving the APS will signal the start of RBS's return to the private sector.

RBS boss Stephen Hester said: "We have continued to make the bank safer and stronger as we clean up problems of the past."

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