RBS chief: We'll lend more but still make a loss

ROYAL BANK of Scotland underlined the scale of the banking crisis today when it warned that it would make a loss this year despite the Government's £20 billion bail-out.

But new RBS chief executive Stephen Hester gave ministers a glimmer of hope by revealing that he would lend more cash to homeowners and small businesses to combat the downturn.

Mr Hester told BBC Radio 4's Today programme that the bank's priority was to "support customers in difficult times" and revealed that its mortgages and loans to business were higher this year than last.

He said: "There are a significant number of things acting as deductions from our profit. People may conclude that profits will be difficult to achieve this year."

Business Secretary Lord Mandelson admitted today that the Government "cannot force the banks to take action" but warned it had "strong expectations" that more help would be offered to small firms.

The bank also announced it had been forced to write off more than £6billion in "toxic" debts this year.