Royal Bank of Scotland (LON:RBS) has reported a dip in profits as it was forced to set aside as much as £125 million for the recent IT glitch.
Operating profit for the first half was down 7 per cent to £1.8 billion from £2 billion after the hit, which will go towards paying back customers who were unable to access their accounts when the technical glitch in June affected the computer system.
The part-nationalised bank also reported losses to the tune of £1.5 billion for the six months to 30 June compared with £794 million in 2011.
The bank, which is 82 per cent state-owned, said the latest loss was due to several exceptional costs, primarily own credit adjustments of £3 billion.
The bank, which also owns NatWest and Ulster Bank, said this was a sign RBS was recovering, as its debt “now trades at tighter margins”.
Revenues fell 8 per cent to £13.2 billion, while an additional £260 million was set aside as compensation for customers who were mis-sold Payment Protection Insurance.
“The first half of 2012 saw RBS make good progress on both of the jobs that make up our recovery plan,” said chief executive Stephen Hester.
“We have continued to make the bank safer and stronger as we clean up problems of the past.”
The company warned however that economic and regulatory challenges “are unlikely to abate” over the remainder of the year.
Hester also confirmed the bank had sacked a number of staff after investigations into the Libor rigging scandal.
“The Libor situation is on our agenda and is a stark reminder of the damage that individual wrongdoing and inadequate systems and controls can have in terms of financial and reputational impact,” he said.
The float of its insurance arm, Direct Line, is on track according to RBS and looks set for October.