The figure is unconfirmed, although it is expected that chief executive, Sir Fred Goodwin, will write off some £500 million from the value of loans linked to US mortgages. Some analysts have been more pessimistic, believing that the total could be as high as £1.9 billion.
The bank has taken a hit from the credit crunch and rumours have circulated that a slippage in second half earnings could also be confirmed. It is also believed that the £50 billion takeover of Dutch bank ABN Amro has led to vastly increased write down levels.
The firm is also expected to write down second half earnings which stem from problems in capital markets as well as the credit crunch. If this all comes to pass, it would be the first major setback since Goodwin took over at RBS in 2000.
As well as RBS, Citigroup is also expecting to report that losses are far exceeding profits on its entire non-conforming range. Chairman and chief executive of citi markets and banking in Europe, the Middle East and Africa, William Mills, confirmed that he expected Citigroup’s non-conforming losses ‘greatly exceeded the profits we made’ and that the company ‘gave all the appropriate disclosures’ to investors buying non-conforming products.
Speaking to the Treasury Select Committee, Mills said: “I don’t believe we were reckless. These were products they could analyse and understand.”
UBS EMEA chairman and chief executive, Jeremy Palmer, said: “So far despite the large losses that have been taken, the overall consequences have been fairly well contained.”
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