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Despite posting the second biggest loss (£691m) in UK banking history, analysts say Royal Bank of Scotland (RBS) is unlikely to make any more redundancies than those already expected from the integration of ABN Amro’s capital markets division.

This morning, RBS posted a pre-tax loss of £691m during the first half of this year after being pounded by sub-prime losses of £5.9bn.

Sir Fred Goodwin, chief executive of RBS, said it had been a “chastening experience” and that the shortfall was something he his colleagues “regret very much”. He did, however, point to “progress in a number of areas” that made the credit write-downs “even more unsatisfactory”.

So far this year, in the capital markets division of the bank, staff costs have fallen by 20% as a result of lower variable performance-related pay and an 11% reduction in headcount since the end of 2007.

With regards to its retail and commercial banking division, RBS said: “Total expenses remain under tight control with a reduction in staff costs as we focus on increased efficiency with further investment in customer-facing staff.”

Bruno Paulson, a senior analyst at Alliance Bernstein, says: “Today was as expected and in-line with the write-downs they were talking about in the spring. Any redundancies will be, as stated, because of the ABN Amro merger. If we slip into a UK recession, causing UK loan losses, then they may be forced to cut costs further”

Another analyst wasn’t quite so positive: “RBS has made it fairly clear that post the integration of ABN they will look carefully at all the businesses and part of that is an ongoing cost-cutting exercise that will be looked at again after these results.”