The Royal Bank of Scotland, which is backed by taxpayers, also revealed that a further £135million will be needed to cover the cost of mis-selling payment protection insurance, while another £50million charge relates to mis-selling interest rate swaps to small businesses.

In all, it means a total of £310million has been racked up in charges at the bank.

RBS revealed a pre-tax loss of £1.5billion, almost double the £794million loss it suffered last year.

The bank, which is 80 per cent state-owned, has been rocked by the fallout of the computer glitch that locked many RBS, NatWest and Ulster Bank customers out of their accounts.

RBS chief executive Stephen Hester said: ‘We have continued to make the bank safer and stronger as we clean up problems of the past.’

The bank has also dismissed a number of employees for misconduct following investigations into the Libor inter-bank rate price-fixing scandal.

The computer glitch hit the bank’s systems on June 19 and is currently being investigated.

RBS will compensate customers for any loss suffered as a result of the glitch.

Mr Hester waived his annual bonus because of the problem.

He said: ‘We are in a chastening period for the banking industry. The consequences of the sector’s past over-expansion are still being accounted for, probably with some way still to go.

‘The mistakes and vulnerabilities carried over from that period are both financial and cultural.’

RBS revealed a 14 per cent slide in total income to £13.6billion and its core banking operations dropped 19 per cent as operating profits slid to £3.2billion.



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