RBS halves bad debt losses in Q3

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London: Royal Bank of Scotland more than halved its third-quarter losses as bad debts in results released on Friday and its shares rose over 7.5%. Investors, nevertheless, fretted over a poor performance at its investment banking arm, which trailed European and US rivals. It has posted an operating loss of 1.53 billion pounds for the September quarter

Part-nationalised RBS, which earlier this week agreed to a further cash injection from the government and drastic asset disposals, said investment banking profits shrank to 375 million pounds ($619.5 million) from 1.1 billion pounds in the second quarter, hit by impairments and an easing of favourable conditions that had propped up performance in the first half. RBS, 84% state-owned as a result of Tuesday's deal with the government, said impairment losses, which have wiped out profits so far this year, shrank 30% to 3.3 billion pounds and were showing signs of plateauing. That helped the bank's third-quarter operating loss narrow to 1.5 billion pounds from 3.5 billion pounds in Q2.

But, it cautioned bad loans were expected to remain at elevated levels for the next few quarters, with conditions in Ireland and the United States remaining difficult. "I have repeatedly said this is a marathon, not a sprint, and so it is proving, chief executive Stephen Hester said of the banks' performance over the past three months.