ROYAL Bank of Scotland unveiled the biggest loss in British corporate history, overshadowing a second banking sector bailout and sending its shares reeling to their lowest in over a quarter of a century.
RBS said overnight it was on course to report a 2008 loss of up to 28 billion pounds ($60 billion) and that further hits from bad debts were inevitable, bruising the European banking sector, which fell 8 percent to a 13-year low.
News of RBS's record-breaking deficit came as the UK government announced a second support package for banks designed to kick-start lending to businesses and consumers.
The scheme failed to reassure investors, however, and RBS shares closed down 67 percent at 11.6 pence, having earlier slumped to 10 pence.
Analysts said uncertainty over whether the government's rescue plan would have the desired effect had compounded the damage done by RBS's warning that the size and timing of future credit losses "cannot be predicted."
"The read across to other stocks is not great," said Simon Willis, banks analyst at NCB Stockbrokers.
"How much capital is enough? The answer is nobody knows."
"The bottom line is that nobody knows whether the government's new proposals will work, or will be enough. They're short on detail in some respects."
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