London: Royal Bank of Scotland Group, Britain's biggest government-controlled lender, reported a narrower-than-expected full-year net loss, and said impairments for bad loans are likely to have peaked.

RBS reported a net loss of £3.6 billion (Dh13.21 billion), compared with a loss of £24.3 billion a year earlier, the Edinburgh-based bank said yesterday in a statement. That beat the £6.01 billion estimate of nine analysts surveyed by Bloomberg.

Impairments "appear likely to have peaked", the company said in the statement. "The group is ahead of its targets on every published measure for this first year of the five-year plan."

RBS, which needed £45.5 billion in taxpayer-funded support, is undergoing the most complicated restructuring of any company in history, Hester said last month. The bank is selling assets and halting some activities such as leveraged finance after putting £282 billion of assets into a government protection program that caps losses on toxic loans.

"The numbers look better-than-expected and capital ratios are in line with expectations," said Arturo De Frias, an analyst at Evolution Securities Ltd. in London who has a "buy" rating on the stock. "Impairments look less than expected."

RBS yesterday said impairments on bad debt rose "sharply" to £13.9 billion. That almost matched the median estimate of £14.17 billion of four analysts surveyed by Bloomberg.

Operating profit at RBS's investment bank was £6.35 billion compared with a loss of £1.27 billion last year, the bank said.

Hester, 49, will waive his right to a bonus of £1.6 million amid public anger over such payments after taxpayers bailed out the banking system.

Good performance

The bank said Hester had "significantly outperformed" his 2009 targets and that he would be rewarded "fairly, appropriately and at market levels." Executives at Barclays Plc and Lloyds Banking Group Plc are also forgoing their bonuses.

RBS set aside 27 per cent of revenue for pay and bonuses for investment bankers in 2009. Barclays Capital, the investment banking unit of Barclays, paid 38 per cent of revenue, while Goldman Sachs Group paid 36 per cent.

RBS has fallen 37 per cent in London trading since the end of August to yesterday, making it the worst-performer in the five-member FTSE 350 Banks Index, which has fallen 2.8 per cent. RBS has a market value of £20.4 billion.

Barclays, Britain's second-largest bank, more than doubled second-half profit to £7.5 billion when it reported results.

Lloyds Banking Group, Britain's biggest mortgage lender, reports today and HSBC Holdings on March 1.