RBS, owners of NatWest Bank, have posted £691m loss for first half 2008. This compares with £5bn profit for first half 2007. Shares went up 2.7% as the loss was less than analysts expected. Much of the losses stem from ABN Amro acquired by RBS last year. To boost cash reserves, RBS announced in April its plans to conduct a rights issue, selling shares worth £12bn, the biggest in UK corporate history (rights issue - issue extra shares and offer them to existing shareholders usually at a discount to the current share price).
The banks hardest hit in the credit crunch have been Citigroup, Merrill Lynch and UBS. JPMorgan have also reported losses of $1.5billion to date after hedges for the July-September quarter (Q3).
The collapse of the subprime mortgage market and resultant losses have caused money market funds to stop buying asset-backed commercial paper forcing funds to unwind holdings and drive up yields.
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