RegulationAccounting StandardsRBS chief says accounting obscures improved performance

RBS chief says accounting obscures improved performance

Stephen Hester says that better operating performance of RBS in Q3 was obscured by fair value volatility

RBS POSTED a loss in Q3 that its chief executive attributed to accounting rules obscuring improved performance at the bank. RBS took an £858m charge on the fair value of its own debt.

The bank also suffered an £825m charge on the fair value of its government-backed insurance policy the Asset Protection Scheme (APS). The APS is structured as a credit derivative, and movements in the fair value of the contract led to the charge. The value fell due to tightening credit spreads across the portfolio of assets covered by the scheme.

RBS’ core operating profit for the period stood at £1.7bn, but posted a loss of nearly £1.4bn before tax.

Stephen Hester RBS group chief executiveChief executive Stephen Hester (pictured), a former FD at Abbey National, said that accounting had covered up the improving operating performance at the bank, reported Sky News.

“The accounting treatment of some balance sheet items is volatile and can sometimes obscure our underlying story,” said Hester.

Related Articles

Sports Direct implements FRC corrections in annual reporting

Accounting Standards Sports Direct implements FRC corrections in annual reporting

1y Stephanie Wix, Writer
Former CFO joins IASB board

Accounting Standards Former CFO joins IASB board

1y Stephanie Wix, Writer
Cashflow statement improvements targeted by watchdog

Accounting Standards Cashflow statement improvements targeted by watchdog

1y Stephanie Wix, Writer
FRC expects Brexit narrative within annual reports

Accounting Standards FRC expects Brexit narrative within annual reports

1y Stephanie Wix, Writer
FRC consults on approach to updating FRS 102 for changes in IFRS

Accounting Standards FRC consults on approach to updating FRS 102 for changes in IFRS

1y Richard Crump, Writer
IASB issues amendments to insurance contracts standard

Accounting Standards IASB issues amendments to insurance contracts standard

1y Richard Crump, Writer
LAPFF urges FTSE 350 companies to disregard the FRC

Accounting Standards LAPFF urges FTSE 350 companies to disregard the FRC

1y Richard Crump, Writer
FRC proposes changes to FRS 101

Accounting Standards FRC proposes changes to FRS 101

1y Richard Crump, Writer