Aug. 3 - The chief executive of the state-controlled Royal Bank of Scotland says the losses announced as it reported first-half results should be taken as a sign the bank is being made 'safer'. Hayley Platt, reports.
The Royal Bank of Scotland is paying a hefty price for its missteps. In announcing its first half results, the partly nationalised bank also made a series of disclosures about the financial and human cost of some of its recent problems. RBS says it had taken a 125 million pound hit from a computer failure in June which prevented customers from using their accounts. It has set aside a further 135 million pounds to compensate customers mis-sold insurance on loans. RBS also revealed that it had dismissed a number of employees for misconduct as a result of an investigation into the Libor rate-rigging scandal. It's still under investigation by regulators, along with other banks. BGC's Louise Cooper dismissed suggestions that a full-nationalization of the bank may be imminent. SOUNDBITE: Louise Cooper, BGC Partners, saying (English): "I think for the timebeing RBS will remain partially floated although of course the government will retain it's stake because it's still losing an awful lot of money on where it originally purchased the shares of RBS." The bank made a first half operating profit of 1.8 billion pounds. That's down from nearly 2 billion for the same period last year. However, a rise in the value of the bank's debt propelled it to a sizeable accounting loss, bringing it to an overall pre-tax loss of 1 and a half billion pounds. But RBS boss Stephen Hester insists the bank is on track. SOUNDBITE: Stephen Hester, CEO Royal Bank of England, saying, (English): "We've repaid all of the liquidity support, a huge amount of support that RBS took in the crisis, we're poised to repay the asset protection scheme another big exposure of the state to RBS's safety and so while this involves taking losses it's if you like a sign that we're cleaning up this bank and making it safer." Overall the numbers were inline with expectations and RBS shares rose almost 7 percent by afternoon trading. Hayley Platt reports.