Projo Biz Blog

Royal Bank of Scotland Group plc, the owner of Providence-based Citizens Financial Group, is the latest big bank caught in the fallout from the subprime lending crisis.
Fred Goodwin, CEO of the Royal Bank, based in Edinburgh, Scotland, said this morning the bank anticipates writedowns of nearly $2.6 billion because of the subprime lending crisis in the United States. Still, it expects operating profit and earnings per share for the full year to be “well ahead” of the market consensus. The bank also expects to write down $613.7 million as a consequence of its acquisition of ABN Amro Holding NV.
The write off from the subprime loans, made to borrowers with weak credit, and costs related to the takeover were lower than many analysts had expected. “In the second half of 2007, rising mortgage delinquencies and expectations of declining house prices in the U.S. have led to a deterioration of the estimated fair value of these exposures,” the Royal bank said, in a statement.

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