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RBS net loss triples to £1.52 bn on debt charge

State-rescued Royal Bank of Scotland on Friday announced a first quarter net loss of £1.52 billion ($2.46 billion), almost three times the amount posted a year earlier.

RBS, 82 per cent owned by the British government after a massive bailout in the global financial crisis, posted a 2011 first quarter net loss of £528 million.

The lender said losses soared owing to an increase in the value of its outstanding debt to £2.46 billion.

‘As RBS’s credit spreads tightened during the quarter, a charge of £2,456 million was booked for (our) own credit adjustments,’ RBS said in a statement.

But the bank’s underlying performance was brighter, with RBS posting a first quarter operating profit of £1.18 billion.

RBS also confirmed that it would repay the last of emergency state loans totalling £163 billion but the British government will still own almost all of the bank after £45.5 billion bailout following the 2008 financial crisis.

The Edinburgh-based bank said it would also begin to pay dividends to holders of preference shares at a cost of £350 million after an EU ban on such payments in the wake of the bank’s financial rescue expired.

‘The start of 2012 has shown pleasing progress at RBS within the context of a flat economic environment,’ CEO Stephen Hester said.

‘Excellent progress continues in removing ‘mistakes’ of the past. Non-core assets have fallen, again. Liquidity is stronger, again. Next week the bank will repay the last of the UK government-backed funding support we received during the crisis.’

RBS shares jumped 1.65 per cent to 24.95 pence in early deals.
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