RBS reports higher losses, lending slightly up in Romania

Royal Bank of Scotland Group (RBS) today ( February 23 ) reported worse than expected results, with losses of nearly GBP 2 billion ( over EUR 2.35 billion ) for the group in 2011, above the GBP 1.1 billion in losses the year before.

Results for Romania were not disclosed, apart from data on lending. RBS Bank Romania posted GBP 1 billion (or EUR 1.1 billion) in loans last year. Corporate and personal loans were at similar levels – GBP 400 million, while the total value was just slightly down on GBP 1.1 billion the year before. The group was said to have plans to sell several Eastern European subsidiaries in 2009, with Romania and Slovakia allegedly on the cards for a sale. Nothing official has yet been announced on the potential sale for the Romanian subsidiary. RBS expanded operations in East Europe through the takeover of Dutch lender ABN Amro Holding NV in 2008, which gave it operations in Poland, Romania and the Czech Republic. “We have three jobs at RBS - to support our customers, to defuse our legacy risks and to rebuild a successful profitable bank. In 2011 we showed results across all three goals, though with much still to do,” said Group Chief Executive Stephen Hester. He hit the headlines earlier this month when he refused a million pound bonus. Losses increased dramatically in 2011, after billion pound plus losses in 2010. RBS blames holdings of Greek bonds and, like other British banks, the cost of compensating customers who were miss sold payment protection insurance for part of the losses. Core total income was also slightly down on 2010 as was core operating profit. RBS is over 80 percent owned by the British state after the government bailed out the bank at the height of the banking collapse in 2008. Big bonuses, particularly for bailed out institutions, are very unpopular in the UK at the moment. Former RBS chief executive, Fred Goodwin was recently stripped of his knighthood for his part in the bank's catastrophic collapse. Present chief executive Stephen Hester has been in place since 2009, and maintains that progress in reaching profitability has been made, despite the seemingly worsening results. editor@romania-insider.com