Royal Bank Of Scotland Falls Into Quarterly Loss

Royal Bank of Scotland fell into a net loss in the third quarter, it said Thursday, hit by a sizeable provision to compensate customers over a huge UK mis-selling scandal.

RBS reported a loss after tax of ?315 million ($407 million, 366 million euros) in the three months to September 30, compared with a net profit of ?448 million in the third quarter of 2018.

The bank has set aside a further ?900 million to compensate over mis-sold credit insurance after claims surged before an August deadline.

RBS had already taken a hit of ?5.3 billion regarding the payment protection insurance (PPI) scandal.

In August, UK watchdog the Financial Conduct Authority said British lenders had paid out ?36 billion in PPI compensation since the start of 2011, when banks lost a high court appeal against tighter regulation of the insurance.

Lloyds Banking Group was responsible for around half that total.

While PPI was intended to cover missed payments, for example if a policy holder lost their job, in many cases consumers were unaware the insurance had been added to a product, while others would never have benefitted despite pressured into taking it.

Edinburgh-based RBS meanwhile remains majority-owned by the British government after receiving the world's biggest banking bailout during the global financial crisis of a decade ago.

From November 1, the lender will become the first major UK bank led by a female chief executive after the promotion of Alison Rose.

She replaces Ross McEwan, recently chosen to head National Australia Bank.