The loss is suspected to be due to its role in the industry's mis-selling scandal and its recent IT meltdown, which affected millions of customers, Sky News reported today.
Sky said that RBS will say it is increasing its provision for compensating customers who bought payment protection insurance from the bank by £130 million.
The bank will also say that it is setting aside £125 million to compensate customers and improve its IT system following the meltdown in June.
The bank is 83% owed by the UK taxpayer after receiving £45 billion in government support and speculation has been widespread that Government ministers have been talking about nationalising the bank entirely - although press reports in the Financial Times suggest this would be unlikely to happen.
One pundit said: "Reports of the nationalisation of RBS is just fodder to get away from the Olympics. You have to remember that without this great sporting even going on at the moment you would be likely to be reading stories about UFO sightings and the wierd and the wonderful. It is the tradfitional silly season after all."
