TAXPAYER-BACKED Royal Bank of Scotland racked up more than £300MILLION worth of charges today as it counted the cost of an IT meltdown and two mis-selling scandals.
The 80 per cent state-owned bank set aside £125million for dealing with the fallout of the computer glitch that locked many RBS, NatWest and Ulster Bank customers out of their accounts.
The group took a £135million hit to cover the cost of payment protection insurance (PPI) mis-selling, bringing its total bill to £1.3billion, while it took a £50million charge to compensate small businesses that were mis-sold complex interest rate swaps.
The mounting provisions came as the bank, which has 30million customers worldwide, unveiled a pre-tax loss of £1.5billion, compared to a £794million loss last year.
But RBS boss Stephen Hester said: “We have continued to make the bank safer and stronger as we clean up problems of the past.”
RBS said it had dismissed a number of employees for misconduct as a result of investigations into the fixing of Libor - the interbank lending rate at the heart of the most recent scandal to rock the banking industry.
The group said it continued to co-operate with investigations but, like Lloyds Banking Group and HSBC before it, said it was not possible to measure the impact on the bank, including the timing and amount of fines or settlements.
The IT glitch that hit RBS group systems on June 19 is being investigated by an independent external counsel with the assistance of third party advisors.
The group said it has agreed to reimburse customers for any loss suffered as a result of the incident and warned additional costs may arise once all redress and business disruption items are clear. A further update will be given in the third quarter.
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