RBS reported a loss after tax of £315 million in the three months to Sept 30, compared with a net profit of £448 million in the third quarter of 2018.

The bank has set aside a further £900 million to compensate over mis-sold credit insurance after claims surged before an August deadline.

RBS had already taken a hit of £5.3 billion regarding the payment protection insurance (PPI) scandal.

In August, UK watchdog the Financial Conduct Authority said British lenders had paid out £36 billion in PPI compensation since the start of 2011, when banks lost a high court appeal against tighter regulation of the insurance.

Lloyds Banking Group was responsible for around half that total.

While PPI was intended to cover missed payments, for example if a policy holder lost their job, in many cases consumers were unaware the insurance had been added to a product, while others would never have benefitted despite pressured into taking it.

Edinburgh-based RBS meanwhile remains majority-owned by the British government after receiving the world’s biggest banking bailout during the global financial crisis of a decade ago.

From Nov 1, the lender will become the first major UK bank led by a female chief executive after the promotion of Alison Rose.

She replaces Ross McEwan, recently chosen to head National Australia Bank.