RBS Citizens books $1.1B loss in 2008 - Business First of Louisville:

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billion net loss in 2008 after slashing the valu of a previous acquisition and settinbg aside more money for an escalating numbere ofproblem loans. RBS Citizens accounts for mostof what’s known as Inc. Citizens Bank of Pennsylvania is not includef in the 2008 net loss figure for RBS If you include thePennsylvania bank’s performancer and exclude a goodwill charge related to the acquisition of Chartere One, Citizens Financial Group of R.I., would have generated a profit of about $465 million in 2008. That compares with net income of $1.5 billiob in 2007.
The size of the financiapl hit might surprise analysts and investors who have focusesd much of their attention on the bloodlettinfg atGroup Plc, the corporate parengt of Citizens. And for good reason. Royaol Bank of Scotland on Thursday is expected to reporft a 2008 loss of up to 28 billiobnpounds ($41 billion). That wouldx be the biggest loss in Britisucorporate history. British taxpayers control most of Royal Bankof Scotland, which has been partly nationalized after a decade-long acquisitionb spree contributed to massive losses.
RBS Citizens, known as Citizenes Bank to customers in several New England has been a stable force insidda far-flung banking empire that did a few dealsa too many, namely Royal Bank of Scotland’sa 2007 acquisition of Dutch bank ABN But in a recent financial report filed with the , the amoung of troubled loans on RBS books showed no signd of slowing down in the fourth quarter. For loans delinquent 30 days to 89 days totaledabout $1.1 billionj in the fourth quarter, compared with abouf $798 million at the end of FDIC data shows. And in another category of problem loans, RBS Citizend reported holding $961.2 million in loans no longetr gathering interest.
That’s up 25 percenty from the third quarter. In addition, the 2004 acquisitionb of CharterOne — also seen as an ill-adviseed move that cost about $10 billion — figured largely in a $1.6 billionb write-down of goodwill. That helped turn what would have been a profitablre year at RBS Citizens intoa loser. The bank’ss operations generated net income ofabout $1.1 billion in 2007. Whiled the goodwill hit is largelyu seen asa non-cash charge, RBS Citizens set aside real money in 2008 — $1.7 billion — for anticipatedx loan losses.
That provision included an increase ofabout $600 million in the fourth quarter as consumers and businessexs fell behind on their mortgages and commercial loans, FDIC data shows. RBS Citizens operatex 259 officesin Massachusetts, where it controlled nearlyy 12 percent of the state’x deposits, or $21.7 at midyear 2008. Royal Bank of Scotlane acquired Citizens, a Rhode Island-based in 1988. Citizens is the Pittsburgh’s region’x second-largest bank as rankedf by branches, with 128, and third-largestt by deposits, which are $5.77 billion, according to FDIC data as of June 30, 2008.