RBS swings to a loss after £900m PPI hit

Royal Bank of Scotland has tumbled to a loss in the third quarter after taking a £900 million hit for payment protection insurance (PPI) claims.

The part-nationalised lender reported pre-tax operating losses of £8m for the three months to September 30, down from £961m a year ago.

It posted attributable losses of £315m, against profits of £448m a year earlier.

RBS – still 62% owned by the government – blamed losses on the £900m bill for PPI following a last-minute surge in claims ahead of the August 29 deadline, as well as a “particularly challenging” quarter for its investment banking arm.

RBS also revealed another £55m in charges set aside for increased economic uncertainty in the third quarter as Brexit continues to take its toll.

Despite the third-quarter losses, RBS said it remained on track for full-year expectations in “uncertain times”.

The group said operating profits stood at £2.7 billion for the nine months of the year so far, down slightly on the £2.8bn reported a year ago.

The figures mark the last for boss Ross McEwan before he hands over to the lending giant’s first female chief executive.

Mr McEwan leaves on October 31, paving the way for Alison Rose to make history as the first woman to run one of Britain’s biggest high street banks.

Chief financial officer Katie Murray said: “These results demonstrate our solid underlying performance in a tough operating environment.

“We have seen strong growth across the business and our sustained high levels of capital and liquidity mean we are well positioned to support our customers in these uncertain times.”

The PPI bill was at the top end of the £600m to £900m range given by RBS last month when it cautioned over higher-thanexpected claims ahead of the deadline.

Ms Murray said she would be “brave” to say the latest PPI charge draws a line under the saga – saying it was the group’s “best estimate” .

RBS shares fell 7.80p to close at 225.90p