RBS loss is the biggest of any bank in world
ROYAL Bank of Scotland lost more than any other bank in the world last year, booking a pre-tax operating loss of nearly $60bn (£36.7bn), according to figures released today.
The Banker magazine’s Top 1000 World Banks 2008/09 survey revealed that RBS was the world’s biggest loser, beating Wall Street giant Citigroup, which lost slightly more than $53bn, into second place,
HBOS, the bank that was taken over by Lloyds TSB last year, was the sixth largest loser, at $15.8bn.
Overall, the world’s banks endured a nightmare year, with total profits down 85.3 per cent from $780.8bn to $115bn and return on equity falling from 20 per cent to 2.69 per cent.
RBS was the world’s largest bank by assets, but slipped three places in the capital strength stakes to seventh.
The world’s largest bank by capital strength remains JPMorgan Chase – bolstered by its acquisition of Bear Stearns and Washington Mutual – with $136bn of Tier 1 capital.
Bank of America also benefited from an acquisition, retaining second place in the capital stakes, after its $50bn takeover of Merrill Lynch.
The crisis among European and American banks saw more conservative lenders top the list of largest profits for the year.
China’s ICBC booked earnings of $21.3bn for the year, followed by China Construction Bank with $17.5bn and Spain’s Santander, with $15.8bn.
“These banks stuck to the basics of banking and did not get involved in some of the more complicated and highly leveraged financial instruments that caused so much damage at banks like Citigroup, Royal Bank of Scotland and UBS,” said The Banker editor Brian Caplen.
However, Britain’s HSBC, with $9.3bn and Barclays, with $8.8bn, made the top ten, in sixth and seventh place respectively.
Caplen said: “This just shows the impact that the crisis has had on profits, particularly in the West. When you get problems with major players, it has an impact on the whole system.”