ROYAL Bank of Scotland has this morning become the latest of the major UK banks to make huge provisions for the grim economic conditions brought by the Covid-19 pandemic.

State-backed Royal booked net impairment losses of £802 million for the first quarter, which included a charge of £628m to reflect the “more uncertain economic outlook”.

The provision dragged first-quarter profits attributable to ordinary shareholders down to £288m, from £707m for the same period last year.

Royal Bank, which was bailed out by taxpayers during the financial crisis around a decade ago, said the outlook is “now subject to significant uncertainty” in light of the coronavirus pandemic.

Chief executive Alison Rose told reporters this morning that the bank has not yet seen large defaults on loans, with customers taking advatantage of government schemes and support provided by the bank. The bank has also seen an increase in savings and a reduction in spending as customers protect their positions. But Ms Rose said it was still "very early days".

She noted that there was a "huge amount of uncertainty" regarding the pandemic and that it was "difficult to predict the impact", but said the bank had increased provisions to take account of the risk.