RBS’ Shipping Impairment Provisions at USD 585 Mn

As challenging market conditions persisted in the shipping sector during the first half of 2016, the Royal Bank of Scotland (RBS) reported impairment provisions related to its shipping business at GBP 445 million (USD 585.5 million).

The dry bulk sector scored the largest part of the impairment provision which were at GBP 379 million for the business, while the bank’s provisions for the container sector stood at GBP 21 million.

RBS reported an operating loss before tax of GBP 274 million in the first half of the year and an attributable loss of GBP 2 billion.

The first half included a net impairment charge of GBP 263 million, primarily related to the shipping portfolio, compared with a release of GBP 319 million in the same period a year earlier.

“We’re at the mid-way point in our five year plan and we’re making good progress. We are clearly in phase 2 of our strategy where our focus is on drawing a line under many of the legacy issues that have plagued this bank, and transforming the core business,” CEO Ross McEwan said.

During the second quarter of 2016, the bank recorded an operating loss of GBP 695 million, compared with an operating profit of GBP 224 million seen in the same quarter of 2015.

The 73-percent state-owned RBS, which earlier decided to sell its Greek ship finance business, received bids worth around USD 3 billion for the business.

Currently in the midst of a restructuring, the bank opted for the sale in an effort  to return to profit after eight straight years of losses.

World Maritime News Staff