RBS to announce major losses: report


The Royal Bank of Scotland, Britain's second largest bank, is to announce around £4 billion ($8 billion; Dh29 billion) worth of fresh losses linked to the credit crunch, the Financial Times reported on Saturday.


The report came after media said on Friday that the bank was set to ask shareholders for a massive cash boost after being hit by sub-prime-linked losses and surging costs related to its takeover of the ABN Amro bank.


It points to the pressures currently facing some of the world's largest financial institutions.


On Friday, US banking giant Citigroup reported a $5.1 billion (Dh19 billion) net loss during the first quarter and said it would cut an additional 9,000 jobs as it struggles with bad bets on subprime mortgages.


Shares in both RBS and Citigroup rallied on the news amid hopes that banks were close to sorting out their problems.


Without citing sources, the FT said that RBS would unveil the £4 billion figure next week and its board would meet this weekend to approve the losses and the rights issue.


A European consortium led by RBS and grouping Belgian-Dutch company Fortis and Spain's Banco Santander bought ABN Amro for $100 billion in 2007 in the biggest-ever takeover in the global banking sector.


RBS had revealed that strains from the global squeeze on credit cost the group £2.5 billion last year, in annual earnings published in February.


A spokesman for RBS was not immediately available for comment. It holds its shareholders' annual general meeting next Wednesday. (AFP)