By late morning trading on Friday, RBS shares were down eight per cent at 27.85p, having fallen as far as 20 per cent at one point.
Investors were responding to the bank's reported first-half loss of almost £800m in contrast to the £1.17bn profit the bank made in the first half of 2010. It was made evident that the bank would struggle to recover at the present time amidst feeble economic growth. This all comes at the end of a week saturated with fears over the solvency of various eurozone economies.
The eight per cent drop follows a six per cent decline in RBS shares on Thursday. Other banks, including Barclays and Lloyds Banking Group, have also taken a hit.
RBS' performance over the first half of 2011 has been put down to a number of factors. The state-controlled UK bank absorbed almost £1.6bn of charges in light of the Greek debt crisis and the UK insurance mis-selling scandal. However, the bank said that its Greek writedown was more conservative than those of its rivals and suggested that it could therefore be offset by almost £300m of credit depending on the progression of proposed restructuring plans.
In line with news out this week from rival banks, RBS has put forward cost-saving proposals to include as many as 2,000 investment banking redundancies. RBS Chief Executive Stephen Hester admitted that the bank's economic recovery had been slower than they might have hoped.