RBS expected to announce costs for IT blunder

Michael Bow
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ROYAL Bank of Scotland is expected to announce plans to set aside millions of pounds today to pay for costs related to its computer blunder in June, which left it unable to process customer transactions.

The bank, which is 82 per cent owned by the taxpayer, will reveal its first interim results since the meltdown today – and provision is expected for costs related to the IT fiasco, the mis-selling of insurance and interest rate swap products.

It follows similar provisions laid out for PPI and swap costs by high street rivals Barclays and HSBC in their interim results.

The bank faced the wrath of its customers and those at its subsidiaries, NatWest and Ulster Bank, in June when payments were disrupted due to a failure in its computer systems. The results, announced this morning, are expected to be mixed for RBS.

Cormac Leech, bank equity research analyst at Liberum Capital, said: “I’m expecting investment banking revenues to be down versus the first quarter and also volumes on its retail bank. Lending could also be lower than expected, with a contraction in net lending in the UK, in particular to SMEs.” RBS declined to comment.

eclined to comment ahead of the today’s results.