RBS predicts massive loss; shares skid

Shares of Royal Bank of Scotland Group (RBS) plunged in London after the British bank said it may post a loss of as much as £28bn (US$41.6bn) for the year 2008, the biggest ever reported by a UK company, as the credit crisis worsens. The loss would surpass Vodafone Group Plc’s £22bn net loss in 2006. Britain's biggest government-controlled bank may post a full-year loss before exceptional goodwill impairments of as much as £8bn, Edinburgh-based RBS said in a statement. In addition, the bank may write down the value of past acquisitions by as much as £20bn. The bank said it expects to post £8bn of credit market writedowns for the year 2008, boosted by losses on US collateralized debt obligations (CDOs). Credit impairment losses may total as much as a further £7bn, including a £1bn loss on its loan to bankrupt chemical maker Lyondell Chemical Co. "The dislocation of credit markets and the global economic downturn continue to hit RBS hard," CEO Stephen Hester said. "Significant uncertainties and risks inevitably remain." "We can all be sure there will be further significant credit losses, but we can’t be sure of what amount and what timing," Hester said.