RBS sinks £1.4bn into the red

RBS has announced pre-tax losses of £1.38bn for the three months to the end of September.

The lender – which is 84 per cent owned by the taxpayer – said market conditions would remain challenging.

Chief executive Stephen Hester said the bank was making "good progress in our recovery", but that highly volatile accounting charges could "obscure our underlying story".

He said that underlying operating profits had risen from £250m to £726m.

Since October 2008, the bank has announced 23,000 job losses worldwide, including 17,100 in the UK.

Richard Hunter, head of UK Equities at Hargreaves Lansdown, said: "At RBS, the long hard slog continues for the beleaguered bank, yet there are some signs of optimism.

The investment banking arm continues to struggle in a difficult environment, whilst the increase in the value of the bank’s own debt is a concerning development. Set against this, at an operating level RBS is making some progress and the complex restructure of the entire business seems to be at the top of the bank’s agenda."

RBS took a £825m hit on the toxic asset protection scheme backed by the Government.

Hester added: "There is plenty of work still for us to do and obviously we can be affected by the outside world and the pace of economic recovery. There are certainly some clouds out there and we've still got our raincoat on."