LONDON, August 8, 2008 (AFP) - The Royal Bank of Scotland revealed an 11.4-billion-dollar hit from the US subprime crisis on Friday, and a resulting half-time loss among the biggest in British banking history.

RBS, the second-biggest British bank, admitted being humbled by exposure to the subprime crisis and reported a first-half net loss of 802 million pounds (1.56 billion dollars, 1.0 billion euros).

That contrasted with a profit after tax of 3.56 billion pounds during the equivalent period in 2007.

Results before tax showed a loss of 691 million pounds from a profit of 5.12 billion pounds 12 months earlier.

The switch into heavy loss was driven by the cost of writing down loans and assets by 5.9 billion pounds because of the subprime crisis and consequent credit squeeze.

Only a year ago RBS was riding high, leading a consortium takeover worth 100 billion dollars for Dutch bank ABN Amro.

On Friday RBS admitted that the subprime wave which then broke had been a sobering experience.

Chief executive Fred Goodwin described the results as a 'chastening experience' that he and his colleagues 'regret very much.'

However the share price of RBS rose by more than two percent in early London trading as the losses were lower than analysts' expectations, dealers said.

RBS said that write-downs on its 'credit market portfolio' totalled 5.93 billion pounds between January and June.

'The first half of 2008 has been as difficult an operating environment as we have encountered for some time, presenting both general and specific challenges to RBS,' Goodwin said in the statement.

'The results we have published today demonstrate progress in a number of important areas, and it is all the more unsatisfactory, therefore, that they record a loss as a result of our credit market writedowns.'

On Thursday, British rival Barclays said that its net profit had slumped by 35 percent in the first half, hit by write-downs of 2.1 billion dollars from the credit crunch.

Barclays' chief executive John Varley also warned of 'tough' times ahead.

The biggest British bank, HSBC, said on Monday that its net profits had tumbled 29 percent to 7.72 billion dollars in the first half.

Meanwhile rescued British bank Northern Rock said this week that the state was boosting its capital by 3.0 billion pounds after it had suffered a first-half loss of 592 million pounds.

The group, which was nationalised after becoming a victim of the global credit crunch, said Britain's Labour government had agreed to convert up to 3.0 billion pounds of its debt into shares to strengthen the bank's balance sheet, subject to approval from the European Commission.

One British bank to have shaken off the credit crisis is Standard Chartered, which said its push into Asia, Africa and the Middle East had fuelled a profits surge.

Britain's fourth-biggest retail bank by market value had reported a 32-percent jump in half-year net profit to 1.84 billion dollars, even as bad debt charges rose by 35 percent.

The US subprime crisis, which began 12 months ago, was brought on by years of a cheap mortgage credit that left many homeowners facing huge debt they were unable to refinance.

A subsequent flood of foreclosures undermined the value of billions of dollars in mortgage-backed assets held by the banks, triggering staggering losses and writedowns on their balance sheets.

Banks in turn have become less willing to make loans among themselves and to businesses, prompting a worldwide squeeze on credit.

In a bid to boost its capital, RBS had in June sold new shares worth 12 billion pounds. Its offer of new shares at a heavily discounted price was the biggest ever rights issue launched in Britain.

The same month, Royal Bank of Scotland sold Angel Trains Group, the largest rolling stock leasing company in Britain, to a consortium of investment funds for 3.6 billion pounds.