The fall added to the generally downbeat sentiment which saw the FTSE 100 around 1% down during morning trading.
The RBS loss was largely due to a £1.193bn payment made to the Treasury with respect to its ‘Dividend Access Share’ in the bank, but that did not excuse the bank in the eyes of many investors, sending the shares lower.
Operating profit was £421m compared with £37m in Q1 2015. Adjusted operating profit was £440m in Q1 2016, down from £1.355bn in Q1.
The private banking unit reported adjusted operating profit 40% lower at £26m, which the company said reflected continued investment in its infrastructure.
The bank also revealed enforcement proceedings had been opened by Swiss regulator FINMA against its private banking subsidiary Coutts & Co. The case related to “certain client accounts” and RBS is cooperating with the authorities, it said.
Also on the private banking theme, RBS confirmed the transfer of the Coutts International businesses in Asia and the Middle East to Union Bancaire Privée, which it said was “the final milestone in the sale of our international private bank.”
RBS also told the market its expected spin-off of its challenger bank Williams & Glyn will be delayed due to the complexities of the process, and the EU mandated deadline of the end of 2017 could therefore be missed.
Chief executive Ross McEwan said the bank has “great brands and great market positions” and they are building a solidly performing, profitable bank “piece by piece.”