Britain’s state-rescued Royal Bank of Scotland on Friday said net losses more than doubled in the first quarter owing to an exceptional payment back to the government.
Losses after tax in the first three months of the year stood at Â£968 million ($1.4 billion, 1.2 billion euros), which compared with a net loss of Â£459 million in the first quarter of 2015, RBS said in an earnings statement.
Pre-tax profits came in at Â£421 million, up from Â£37 million.
However the bottom-line net figure was hit by RBS having to pay the government almost Â£1.2 billion in order to allow the bank to begin paying dividends again.
“An attributable loss of Â£968 million included payment of the final Dividend Access Share (DAS) dividend of Â£1,193 million to the UK government,” RBS said.
In morning deals following the results, RBS shares were among the biggest fallers in London, losing 3.2 percent to 237 pence, with analysts pointing to the higher-than-expected net loss.
The capital’s benchmark FTSE 100 index was down 0.7 percent overall at 6,279.1 points.
“The big question is whether there is light at the end of the tunnel, and whether RBS has turned the corner, or whether the days of over promising and under delivering are set to continue,” said Michael Hewson, chief analyst at trading group CMC Markets.
“There is some good news in that the underlying business did manage to post an operating profit of Â£421 million, but it does appear that the recent market volatility and low interest rate environment that has blighted the performance of its sector peers has also hit” RBS, he added.
– ‘Losses now exceed bailout’ –
The Edinburgh-based lender remains around 73 percent owned by the British government after it was saved with Â£45.5 billion of taxpayers’ cash at the height of the 2008 global financial crisis — resulting in the world’s biggest banking bailout.
“The company has now racked up more than Â£50 billion in losses since the crisis — more than the Â£45 billion forked out to save it,â€ said Joe Rundle, head of trading at ETX Capital, in a note to clients on Friday.
RBS, under the leadership of chief executive Ross McEwan, launched a massive overhaul in 2015 that slashed the bank’s investment banking activities and axed thousands of jobs.
However it still managed to suffer its eighth straight annual loss last year, and in common with many other major banks, RBS has faced huge fines and compensation demands for its alleged role in the manipulation of foreign exchange market and Libor interest rates.
It has also had to set aside billions of pounds, along with other British lenders, to compensate customers mis-sold payment protection insurance on loans.