RBS reduces peripheral debt exposure by £3.5bn

RBS has reduced exposure to peripheral sovereign debt by around £3.5 billion this year.

The bank, which is 83% owned by the Brtish tax payer, said total exposure to central and local governments in Portugal, Greece, Italy, Spain and Ireland had been reduced from £4.6 billion to £1.1 billion this year.

'The group continues to be vigilant, and carefully monitors and controls country risk and exposures. Eurozone peripheral sovereign exposures have been substantially reduced and are at modest levels,' it said in an accompanying statement.  

RBS also told investors in its third quarter update it had taken a further impairment loss of £142 million on its exposure to Greece, taking a little shine off its third quarter net profit of £1.2 billion.

The bank warned it was facing a difficult fourth quarter. 'Forward momentum will be challenging, however, until the economies we serve see stronger growth,' its chief executive Stephen Hester said.

On the whole Hester was satisfied with his bank's performance in an extremely difficult period for it.

He said: 'RBS’s third quarter results show the improved strength and resilience we have built up since 2008. They also highlight the external pressures facing banks, and economies more broadly, which are making the road to recovery longer and bumpier than hoped for.'