RBS records £1.3bn loss as PPI provision mounts

Royal Bank of Scotland has recorded a statutory pre-tax loss of £1.26bn after setting aside a further £400m to compensate customers for mis-sold payment protection insurance.

This latest sum reserved for mis-sold PPI compensation brings the total to £1.7bn for RBS.

Yesterday (1 November) Lloyds Banking Group revealed that it had also set aside a further £1bn to repay customers who were mis-sold the product.

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In the third quarter financial results for 2012, RBS reported operating profits of £1.5bn, up from £650m in the previous quarter and £2m in Q3 2011.

The bank also reduced staff costs by 5 per cent compared to the previous quarter to £1.94bn after cutting headcount by 9,900.

Stephen Hester, group chief executive of RBS, said: “At the heart of any truly successful company is the DNA that clearly sets the company’s purpose as to serve customers well and understands that good performance for shareholders and career prospects for staff come from achieving that purpose.

“The banking industry, including RBS, too often came to be seen as reversing that sequence, with short-term gain put ahead of long-term excellence for customers.

He added: “We have already made much progress, though clearly not enough, and our reputation will take time and facts to recover from past events which are still being accounted for.”