Alison Star

Royal Bank of Scotland has swung to a loss in the third quarter after taking a Hit from the cost of payment protection insurance.

The Edinburgh-based bank, in which the government owns a 62% stake, added its investment bank had a "particularly challenging" three months.

It reported a pre-tax loss of £8m for the July-to-September period after it took a £900m charge for PPI.

These are The Last results before chief executive Ross Mcewan departs.

The New Zealander is being replaced by Alison Rose next month, when she becomes The First woman to lead one of the UK's Big Four banks. She joined The Bank 27 years ago as a graduate trainee.

The Bank had reported a £961m Profit in the same three months a year ago.

But Katie Murray, the finance director, said the results "demonstrate our solid underlying performance in a tough operating environment".

"The Core retail and Commercial Bank continues to perform well and we are making good progress against our targets for the year," She Said .

But its Investment Banking arm, known as NatWest Markets, reported a £193m loss for the quarter as it felt the impact of a "deterioration in economic sentiment for the global economy and a Fall In bond yields".

RBS had warned last month that, like other lenders, it faced a bill for further compensation for mis-sold PPI, but its £900m Hit was at The Top end of expectations.

PPI was designed to cover loan repayments if borrowers fell ill or lost their job, but many were sold to people who did not want or need them.

The industry says there has been surge in claims for compensation ahead of a 29 August deadline set by the Financial Conduct Authority .

The Return to a quarterly loss - The First since the Last Quarter of 2017 - presents a fresh challenge for Ms Rose, who takes over as the UK prepares to leave the EU and when The Bank 's revenues are Under Pressure .

The Bank has been trying to demonstrate that it can consistently return to Profit .

It reported about £60bn of losses in The Nine years after its 2008 bailout.

On a nine-month measure, The Bank remained in Profit , reporting £2. 7bn of profits.

John Moore , senior investment manager at Brewin Dolphin , said: "The Last set of results for RBS were a watershed moment for The Bank , confirming it is on The Road to redemption.

"Whilst this remains the case, today's statement highlights The Legacy issues that The Bank , and many of its peers, still Face - in particular, PPI claims have pushed RBS back to a loss.

"Despite these bumps on The Road , RBS is a very different bank to what it once was and continues to make good progress on a path to recovery. "

On another measure, the bottom line or attributable to shareholders, The Bank 's quarterly losses Reached £315m, compared with a £448m Profit a year earlier.

Source of news: bbc.com