Royal Bank of Scotland has slashed £5.5bn from its total exposure to real estate in the first half of the year.
The part-nationalised bank’s interim results to the end of June revealed its property loan book had fallen from £74.8bn to £69.3bn.
The largest reduction came in the portfolio of loans that it has deemed non-core – those it wants to get rid of by the end of next year. This dropped from £31bn to £27bn.
As well as deleveraging its property loans, the bank also managed to reduce its losses on property loans, which dropped from £2.3bn in the first half of 2011 to £977m at the same time in 2012.
A 77% decrease in losses on the bank’s Irish loans, which dropped from £1.7bn in the first half of 2011 to £398m in 2012, drove the overall fall in impairments.
Despite this reduction, Ireland continues to cause problems for the bank, which still has almost £16bn of property loans through its Ulster Bank subsidiary – half of which are development loans.
Property losses accounted for 30% of the bank’s total losses on loans, contributing to an overall £1.5bn pretax loss.
