Shares in Royal Bank of Scotland (RBS) fell by more than 10 per cent this morning following the bank's interim profit announcement for 2009.
The bank announced pre-tax profits of £15million this morning, but remained downbeat on the bank's outlook as it revealed a £1billion loss after paying tax and dividends to the Government.
Commenting, Stephen Hester, RBS group chief executive said: "This was a momentous half year for RBS. We gave a full and clear account of our vulnerabilities to the 'credit crunch'. We set out comprehensive restructuring plans, now with clear performance targets. And implementation is well under way, though uncertainties remain.
"Our first half results, as we had clearly warned, are poor with a net attributable loss of £1,042 million. However, they highlight well our core business potential, the hard work of our people in difficult times, the strength of our customer franchises and the vulnerabilities and economic headwinds we grapple with," he said.
Like Barclays, it was the investment arm of RBS that kept the 70 per cent taxpayer owned bank afloat so far this year. Its investment arm, GBM saw an operating profit of almost £5billion during the first half of 2009.
However, the bank warned that this could not be sustained, stating: "The exceptionally favourable market conditions from which GBM benefitted in the first half of 2009 are not expected to continue in the second half, and this is likely to have a material effect on Core Bank operating income."
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