RBS posts $1.1 billion loss, bruised by Greece, Ireland

LONDON (Reuters) - Royal Bank of Scotland <RBS.L> slid to a pretax loss of 678 million pounds ($1.1 billion) in the second quarter when its loan book deteriorated, driven by losses on Greek government bonds and little sign of improvement in Ireland.

The loss compared with a profit of 1.17 billion pounds a year ago and came as impairments on bad loans rose to almost 2.3 billion pounds from 2 billion in the first quarter of this year but eased from 2.5 billion pounds a year earlier.

RBS made a provision of 733 million pounds to cover any losses on its Greek bond portfolio and said the impairment charge at its Ulster Bank operations in Ireland was 1.25 billion pounds, just 49 million pounds better than in the first quarter.

Earnings at RBS, 83 percent owned by the government after a bailout during the credit crisis, were also undermined by an 850 million pound provision to cover the costs of compensating customers mis-sold payment protection insurance.

($1 = 0.613 British Pounds)

(Reporting by Sudip Kar-Gupta and Steve Slater; writing by Paul Hoskins)