RBS abandons profit forecast

Royal Bank of Scotland Group Plc, waiting to take up the UK's biggest bank bailout, abandoned its full-year profit forecast as credit-market losses worsened and bad loans rose.

RBS fell as much as 9.5 percent in London trading yesterday after the Edinburgh-based company said it wrote down 1 billion pounds in October against assets tied to Lehman Brothers Holdings Inc and Icelandic banks. It also took 1.4 billion pounds of markdowns in the third quarter before reclaiming 1.2 billion pounds under new accounting rules, the bank said in a statement.

Chief Executive Officer Stephen Hester said the latest charges, coming on top of 5.9 billion pounds in the first half, show the bank has too much risk and may have a full-year loss. The "global financial crisis" has triggered rising loans defaults in the UK, US and Asia, the bank said. The government will own as much as 60 percent of RBS unless investors buy some of the 20 billion pounds of stock it plans to sell later this year.