[ by Howard Haykin ] Royal Bank of Scotland on Friday reported a net loss of £1.99 billion, or $3.1 billion, in the first half of 2012 after it took an accounting charge on its debt and other one-off charges.  the Edinburgh-based bank, which is 82% owned by the British government after receiving a bailout, set aside £125 million to compensate customers for a recent technology problem and £135 million for charges it sold inappropriate insurance to clients. Meanwhile, RBS noted that regulators are currently trying to determine what, role, if any, the bank had in the manipulation of the London interbank offered rate, or Libor.  The firm confirmed that it dismissed a number of individuals in relation to the inquiries, and several of its employees were named as defendants in lawsuits connected to the rate-rigging scandal, according to a company statement.  The names of the former employees were not given. The bank did not take a reserve for potential fines in the Libor matter because it's too early in the process and they could not make an reliable estimate.  However, RBS CEO Stephen Hester said, "We are in a chastening period for the banking industry. The Libor situation is on our agenda and is a stark reminder of the damage that individual wrongdoing and inadequate systems and controls can have in terms of financial and reputational impact." Details of RBS P&L. RBS's £1.99 billion net loss for the 6 months ended 6/30/12, came after it recorded a £2.97 billion accounting charge on its own debt.  By comparison, the bank suffered a first half loss in 2011 of £1.42 billion loss.  First half revenues fell 8% to £13.3 billion.  For the 3 months ended 6/30, the bank's net losses narrowed to £466 million, compared to a loss of £897 million in Q2 of 2011. The bank's operations continue to suffer from weak consumer spending as the fallout from the European debt crisis affected the retail and corporate banking units.  RBS also has been paring back its investment banking division, which reported nearly a 30% drop in operating profit for the first 6 months of 2012, to £264 million. Job and Non-Core Asset Cuts. During this same period, RBS has reduced its work force by 5,700, primarily in the markets and international banking division.  Earlier this year, the firm said it would eliminate 3,500 jobs in investment banking over the next 3 years in response to volatility in global financial markets. The Bank also has been slashing its assets to improve profitability, and at this time, has pared noncore assets by £22 billion, to £72 billion.  In 2008, that same figure as $258 billion. For further details, go to:   [Dealbook, 8/3/12].