RBS 'has dramatically improved', says Stephen Hester

RBS has announced half yearly losses of £1.5bn.

The banking group, which is 82% owned by the taxpayer, has also had to set aside millions of pounds to compensate customers affected by a variety of controversies.

However, the bank has more capital and more deposits to cover its lending.

The chief executive of RBS, Stephen Hester, told the BBC he was optimistic about the future of the bank.