Royal Bank of Scotland (RBS.L) led the FTSE downward once again today as the UK’s blue chip index slid by a further 2.7 per cent (0935 hrs).

The bank – which is 84 per cent owned by the British taxpayer – reported a half year loss of £1.4 billion for the six months to 30 June 2011.

The dismal results included £733 million in provision for exposure to Greek government bonds and £850 million for the mis-selling of payment protection insurance.

RBS was by far the worst performing share on the index, down 10.3 per cent at 27.16 pence - just above its 52-week low of 24 pence.

Stephen Hester, group chief executive of RBS, said challenging market conditions had hampered the group’s restructuring effort.

He explained, ‘There is no shortcut to achieving our goals. We seek excellence in support of customers; a strong risk profile with the past accounted for; and the improved shareholder returns important to all.

‘This is our focus. Economic and regulatory headwinds may be challenging but the momentum that our people and restructuring actions have sustained thus far in the RBS recovery plan should continue to stand us in good stead.’

RBS was not alone in being swept away in today’s volatility.

Barclays (BARC.L) was also hard hit, dropping 8.7 per cent at 179 pence, while Lloyds Banking Group (LLOY.L) was the third worst performing financial stock, down 7.1 per cent at 32.51 pence.

Elsewhere, Weir Group (WEIR.L) dropped 9.1 per cent to 1,690 pence while Cairn Energy (CNE.L) was another victim of the share slide, dropping 6.5 per cent to 290.3 pence.

Glencore (GLEN.L) and Inmarsat (ISAT.L) were the only two shares to make gains, albeit modest, up 1 per cent (395 pence) and 0.5 per cent (396.4 pence) respectively.