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FTSE falls to weekly loss as RBS and IAG weigh

Investors sell down RBS over lack of news on US Department of Justice case that could cost bank $12 billion.

 
FTSE falls to weekly loss as RBS and IAG weigh
 

Royal Bank of Scotland (RBS) has dragged down the FTSE 100 as investors hoping for more information on its US Department of Justice case were left disappointed.

Shares in the bank fell 4.3% to 269.9p, weighing on the FTSE 100, which dropped 10 points to 7,243.

That sent the FTSE 100 to a weekly loss, although the picture over the five days to yesterday across global markets is more positive, as our exclusive Accumulator data table shows.

Lack of a resolution to the misconduct case, which analysts believe could cost the bank up to $12 billion, overshadowed profits of £752 million for 2017, its first annual profit in a decade.

'The headline profit number is little more than a mirage,' said Michael Hewson, chief market analyst at CMC Markets UK.

'The only reason they were able to do so was because the ongoing issue with the Department of Justice remains unresolved.

'The bank set aside another $1 billion of litigation provision in the fourth quarter, with $650 million of that going towards the Department of Justice case taking the overall provision so far to $4.4 billion, but that still leaves it well short of what the total bill might be.'

RBS was joined at the bottom of the index by International Airlines Group (ICAG), down 5.9% at 586.2p as the British Airways owner reported a fall in fourth quarter profits.

Shares in Standard Life Aberdeen (SLA) swung into losses, down 2.3% at 376.9, on news of the sale of its insurance business to Phoenix (PHNX), which jumped 7% to 813p, topping the FTSE 250.

BT (BT) raced to the top of the blue-chip index, up 5% at 244p as a price cap from regulator Ofcom on its charges to rivals for broadband services was set more generously than expected.

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