More losses for banking giant RBS

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RBS, which is 70.3% owned by the taxpayer, announced bottom-line losses of £857 million and bad debt charges of £2.9 billion.

Chief executive Stephen Hester also warned against hopes of a speedy recovery for the business, saying that this year and next would be "very tough" for the group.

"No-one should be in any doubt that this is a process that will take years not months," he said.

RBS said a buoyant three months for its investment banking division had been offset by the impact of record low interest rates on margins and steadily rising bad debts due to the recession.

On a pre-tax basis the losses were £44 million, but the £857 million reverse came after tax, dividend payouts on Government preference shares, and money due to partners on the sale of its Bank of China stake.

The £2.9 billion in bad debt charges compared with just £656 million a year earlier in the tougher economic climate for both businesses and consumers.

Impairment charges as a percentage of its loans rose to 1.33% in the first quarter - while RBS also booked a further £2.1 billion hit on credit market exposures.

The bank is insuring more than £300 billion of toxic debts in a taxpayer-backed insurance scheme but is liable for the first £19.5 billion of any loss.

RBS said it expected up to 85% of the impairments and credit market losses announced to count towards its first loss - meaning the bank will already have burnt through about £4 billion of its buffer.