Royal Bank of Scotland announced a first quarter loss as its exposure to Ireland’s economic woes hit its earnings, and said it expected charges for bad debts from Ireland to remain high in the next quarter.
RBS, 83-percent owned by the British government after it was bailed out during the credit crisis, made an overall first quarter loss of £528m.
Its earnings were hurt by £1.95bn of impairments for loans which have turned sour, mainly in RBS’ Ulster Bank unit which is exposed to Ireland’s struggling economy.
Losses on loans in Ireland hit £1.3bn in the first quarter and RBS said they would remain high this quarter before “gradually declining” in the second half of the year.
RBS chief executive Stephen Hester said: “There are some headwinds, challenging growth and increasing capital intensity for our industry, that have a shareholder and broader read across. But despite that context RBS expects continued progress.”