The Greek debt and increasing PPI claims are taking their toll on Royal Bank of Soctland. 84% of the bank is owned by taxpayers and it has had to pay out £733m towards the Greek bailout. In addition, it has had to set aside £850m to cover the compensation owed to those who were mis sold PPI by the bank. This has led to a £1.4bn loss in the first half of 2011, compared to a £1.2bn profit the previous year.
As a result, the Cheif Executive, Stephen Hesler, has been forced to confirm that a further 2,000 jobs would have to be cut in the next 18 months, on top of the 27,500 jobs it has already cut since the start of the recession. This is being done in the hope of saving money and improving profits.
Shares in RBS had the most dramatic drop on Friday, when they fell more than 13%. Although they then started to recover, they still remained down by about 5.8%.
The Cheif Executive remains positive about the progress being made by the bank however, claiming that the losses are a result of uncontrollable economic factors. He said that despite these factors, the bank is still seeing positive results from its resructuring measures.In addition, it has still managed to me et its business lending targets after having lent £44.2bn to UK businesses.
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MAAT and ICPA accountant, with a passion for making accountancy and bookkeeping accessible. Other interests include cloud-based software development for web and mobile access, keeping fit, reading, and entrepreneurship.