Credit crisis costs RBS $5.6 billion

Royal Bank of Scotland (RBS) has suffered $5.6 billion (£2.9 billion) in writedowns, due to exposures to US subprime debt exposures and losses in its leveraged finance portfolio.

Reporting on its 2007 performance on February 27, RBS revealed that, in addition to the expected losses announced in December, it has also set aside £456 million attributed to monoline exposures.

The losses also include a £978 million subprime-related loss in RBS' Dutch subsidiary, ABN Amro, which is a much larger amount than the £300 million it had announced in December. RBS acquired 38.3% of ABN Amro in October 2007, as a joint acquisition with the Dutch Fortis Bank and Spain's Banco Santander .

In spite of the losses, RBS has posted a pre-tax profit of  £9.9 billion, which is 8% up from £9.2 billion in 2006, including ABN Amro.

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