Mumbai: Royal Bank of Scotland (RBS), UK's second-biggest bank, reported a 691 million pounds ($1.35 billion)  first-half loss, after taking a 5.9 billion pounds ($8.9 billion) write-down on the value of its risky loans.

This was in line with previous disclosure. RBS' capital base, ie, Tier 1 capital ratio, was, however, secure at 5.7 per cent, boosted by a massive 12.5 billion-pound ($24.0 billion) rights issue earlier this year, the bank said.

RBS said despite the loss - one of the biggest corporate losses in the UK - it was on track to rebuild capital with planned sale of assets.

RBS expects to make 5-6 billion pounds from the sale of its insurance arm and said it is in talks with a number of potential buyers.

RBS, which reported a 5.1 billion pound profit a year ago, said the write-downs on credit products were in line with previous guidance but partially offset by an 812 million pound reduction in the value of debt it carried.

The 12.5 billion pounds rights issue was necessitated following write-downs and last year's purchase of a stake in ABN AMRO.

RBS, one of the hardest hit banks in the credit crisis, has so far written down over 8 billion pounds.

Banks, hit hard by the US sub prime housing crisis, have so far written down over $400 billion of assets over the past one year.