RBS reports £1.13bn annual loss

Royal Bank of Scotland (RBS) has reported an annual loss of £1.13bn for 2010, improving on the previous year but still falling short of analyst expectations.

Although the bank made an operating profit of £1.91bn, it was particularly hard hit by a £1.11bn tax charge.

Forecasts compiled by Bloomberg had estimated it would make a loss of £406.5m.

RBS has previously racked up losses of £3.6bn in 2009 and £24.3bn in 2008, when it was bailed out by the government.

In Q4, RBS made a profit of £12m, improving upon the £765m loss in the same period in 2009.

Meanwhile, the bank's impairment charges on bad loans also fell 33% to £9.26bn.

Chairman Philip Hampton says: "The return to operating profit reflects both the internal rebuilding process at RBS and the external recovery in market and economic conditions.

"We are still a good way from where we want to be in terms of our performance but 2010 represents another big stride towards that goal."