RBS pretax Q2 loss at $1.1 billion

Shares in the bank plunged 21 per cent in early trade, the FTSE 100’s worst performer as the index itself was hammered by fears about US and euro zone growth.

The bank slid into the red after posting a 1.17 billion pound profit a year ago, hit by impairments on bad loans of almost 2.3 billion pounds. That was up from 2 billion in the first quarter but a little better than 2.5 billion a year earlier.

The bank wrote off 733 million pounds to cover anticipated losses on its 1.45 billion pound Greek bond portfolio.

RBS group income in the second quarter fell 5 per cent versus a year earlier to just under 7.8 billion pounds as the bank pointed to a drop in revenue at its GBM investment banking operations, citing heightened risk aversion among clients.

The bank incurred lower staff costs in GBM, however, helping second quarter costs fall 6 per cent from the previous quarter.

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