London - Britain's Royal Bank of Scotland (RBS), which is in line to benefit to the tune of 20 billion pounds (31 billion dollars) from a government bail-out programme, Tuesday unveiled more write- downs and signalled that it expected to make its first annual loss ever in 2008.

The beleaguered Edinburgh-based lender said bad debt charges and write-downs totalled 206 million pounds in the third quarter of 2008, in addition to 5.9 billion pounds in the first half of the year.

Stephen Hester, the bank's new chief executive, told the BBC that it would "prove difficult" for RBS to make a profit this year, after operating profits in the first nine months of
2008 - before credit market write-downs - were 8 per cent lower than in the previous year.

In August, RBS reported a loss for the first half of the financial year of 691 million pounds.

"The scale of the market disruption and the economic downturn that is happening as a consequence means that credit losses are rising very sharply," Hester told the BBC.

"I suspect that people may conclude that profits will be difficult to achieve this year," he added.

He admitted that RBS' troubles stemmed from the bank's decision to lend "far too much when times were good" and was now suffering the consequences.

The problems of RBS are also linked to its decision to buy Dutch banking giant ABN Amro for 50 billion pounds as the mood on credit markets was changing last year.

Hester's predecessor, Fred Goodwin, left RBS as part of the bail- out package agreement with the British government in early October. (dpa)