RBS - better news on loss provisions

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Royal Bank of Scotland will release £800m from provisions it had set aside to cover losses on bad loans after an improvement in economic conditions, especially in Ireland.

Reuters reports that RBS said on Tuesday it also expected losses from bad loans to be 'significantly' lower than its previous guidance of 1 billion pounds this year, helped by improving asset prices.

RBS, 80% owned by the UK government, is selling assets from its 'bad bank' quicker and at better prices than it had expected. That means it does not need to set aside as much for the assets in its RBS Capital Resolution (RCR) unit, which was set up this year to sell off or run down some £29bn pounds of assets it no longer wants.

It will release about £500m pounds of the money it had set aside for RCR in the third quarter, much of it related to commercial real estate assets in Ireland. RBS had set aside £4.5bn pounds to cover losses in RCR.

Hit the link below to access the complete Reuters article:

RBS frees up $1.3 billion of provisions as economy improves

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