RBS posts £3.6bn annual loss

Royal Bank of Scotland (RBS), which is 84% state-owned, has today posted a full-year loss of £3.6 billion.

RBS is the second major UK bank to report its 2009 results. Last week, Barclays announced record profits of more than £11 billion - a 92% rise on the previous year.

However, RBS’ loss is not as bad as analysts were expecting, many had predicted losses of around £5 billion.

Furthermore, the figure is much lower than the £24.1 billion loss it reported for 2008 - which represented the largest annual loss in UK corporate history.

Meanwhile, impairment losses at the bank grew sharply to £13.9 billion last year, against £7.4 billion in 2008.

The bank’s chief executive, Stephen Hester, said he expects the bank to return to profit next year.

Last week, Mr Hester, opted not to take his £1.6 million bonus. The bank said he had agreed to waive his 2009 bonus amid public anger over the issue.

The news comes as the UK Financial Investments Ltd (UKFI) approved £1.3 billion in bonuses to RBS’ investment bankers.

The Treasury, through the UKFI, had the right to veto any bonus deal after the bank participated in the Government’s Asset Protection Scheme (APS) - one of the conditions of participating in the scheme was to hand over control of its bonus pot to the Treasury.

In the meantime, Lloyds, which is also part-owned by taxpayers, will publish its full-year results tomorrow.