RBS splits assets after record $34 billion net loss

26 February 2009

Royal Bank of Scotland Plc today reported a net loss of £24 billion ($34.17 billion) for the whole of 2008. RBS, the largest bank in the UK, also announced a splitting of assets after posting the worst ever loss in British corporate history.

RBS chief executive Stephen Hester, said the bank will create a non-core division, which will include many of its Asian banking assets, for potential sale.

Hester said the assets and businesses due to be placed in a `bad bank' of non-core businesses would include Asian and Australian units acquired with ABN Amro.

RBS said it will transfer £540 billion of assets, including derivatives and mortgage-backed securities, to a new division, on the lines of the so-called bad bank created by Citigroup Inc last month.

RBS said it plans to put  £325 billion ($462 billion) of investments into a state insurance programme and shift toxic assets to a new unit.

While, RBS said, actual losses stood at £7.9 million ($11.25 billion), £16.2 billion ($23.10 billion) were writedowns due arising from the disastrous takeover of ABN Amro.