RBS to pay £125m for IT glitch

Royal Bank of Scotland (RBS) has put aside £125m to pay compensation to customers affected by the recent breakdown in its computer systems. Account holders at RBS and its NatWest and Ulster Bank subsidiaries faced disruption for up to two weeks in June after a software upgrade at the bank. RBS released the compensation figure as it reported a half-year loss of £1.5bn, compared with £794m a year earlier. Much of the loss was caused by a £3bn accounting charge. This was a result of the bank hang to change the valuation of its debt. The bank's revenues for the six months to 30 June fell 8% to £13.2bn. Investors appeared to give the results a warm welcome, as RBS's shares ended Friday trading in London up 5.6%. Falling revenues RBS chief executive Stephen Hester told BBC Radio 4's Today programme: "It is a pretty tough external environment, but I think we are making good progress." Continue reading the main story “Start Quote RBS management continues to make useful progress in terms of balance sheet repair” End Quote Ian Gordon Investec analyst Hester: Banks detached from society RBS also said it had set aside a further £135m to cover compensation for customers who were mis-sold payment protection insurance, taking the total up to £1.3bn. In addition, it will pay out up to £50m to cover claims from small businesses who were mis-sold specialist insurance, known as interest rate swaps. The bank is 82% owned by the government, which needed to bail it out in 2008 and 2009 at the height of the global financial crisis. It announced in May that it had repaid the last of the £163bn in emergency loans it received from the UK and US governments. Mr Hester added in a statement: "We have continued to make the bank safer and stronger as we clean up problems of the past. "And despite the tougher economy, these results show our ongoing businesses to be more resilient than before, with many further improvements underway." Reduced costs RBS confirmed that it had dismissed a number of traders linked to the Libor rate-fixing scandal that saw fellow bank Barclays fined £290m in June. Please turn on JavaScript. Media requires JavaScript to play. //

RBS to pay £125m for IT glitch 2012-08-05T11:59:00-07:00 Rating: 4.5 Diposkan Oleh: Undercover 999