The Royal Bank of Scotland (RBS) is back in the red, reporting a £1.4bn pre-tax loss for the third quarter.
The bank cited the "modifications made to fair value of own debt" as the reason for the loss, adding that it was achieving "tangible progress."
RBS made an operating profit of £726m, an increase from the £250m it made in the second quarter.
RBS - which is 84 per cent tax-payer owned - had a £1.15bn profit last quarter and seemed to be emerging from a precarious position.
Market conditions would continue to be difficult, said the bank.
"The accounting treatment of some balance sheet items is volatile and can sometimes obscure our underlying story," said the bank's chief executive Stephen Hester.
Hester added, "Nevertheless, I believe that our results today show clear and measured progress towards our three strategic goals."