RBS reports first half loss of £153 million

<p>The bank has set aside more money to repay customers and settle legal settlements.</p>

Royal Bank of Scotland has reported a £153 million loss for the six months to the end of June. 

This half-year loss follows the company setting aside money for repaying customers and covering potential legal settlements. It also stands in stark contrast to the £1.43 billion profit the company saw during the same period last year.

Other costs have included restructuring, which almost tripled to £1.5 billion. Chief executive Ross Mc Ewan has been working towards cutting staff and refocusing the bank on the UK market.

Earlier this year, RBS and Nomura, a Japanese Bank, were ordered to pay a combined $806 million (£515 million) due to making false-statements when selling mortgage-backed bonds to Fannie Mae and Freddie Mac – two US-based agencies.

In total, £1.3 billion was set aside for lawsuits and customer compensation and £459 million was earmarked for litigation costs. The latter is expected to come mostly from sales of mortgage-backed securities in the US.

Despite the overall loss, the company has also reported that net profit rose to £293 million in the three months to the end of June.

A strong bank, despite "noise"

Mr McEwan told BBC Radio 4 that there was "a lot of noise" in regards to fines and legal action, but said that the bank was "very strong".

He added: "These things ae very distracting so we need to face into these and put our energies into creating a better bank here in the UK."

However, he also warned that there would still be some time before the bank could return cash to shareholders – and the UK government remains one of the biggest shareholders. 

"Even though it will be a number of years before the bank will return cash to shareholders, the firm is moving in the right direction," he explained.

Chancellor George Osborne has said he plans to start selling off shares by the end of the year and experts believe the first sales could begin as early as September.

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