The Royal Bank of Scotland has reported a pre-tax loss of £1.5bn in the six months to June 30, compared to £794m last year.
The bank, 82% owned by the UK taxpayer, has also reported an operating profit of £1.8bn, which is broadly in line with last year's figures.
It said the bill for mis-selling scandals and IT meltdown is £315m – as revealed exclusively by Sky News on Thursday.
Shares in the bank were up more than 5% in Friday trading and closed at 215.7p.
RBS said it set aside £125m for software glitch, but admitted "additional costs may arise once all redress and business disruption items are clear" in the third quarter.
It also confirmed it would set aside £50m for interest rate swaps mis-selling, and another £135m more for payment protection insurance (PPI).
The additional hit for mis-selling now takes RBS's total in the PPI scandal to £1.3bn.
The major IT meltdown in June affected account holders at RBS, NatWest and at the Ulster Bank.
Mr Hester told Sky News: "I don't know where we will end up on Libor. This episode is not part of the RBS I want to lead."
It also confirmed that the US Department of Justice is also investigating the inter-bank rate controversy.
"We are in a chastening period for the banking industry," the bank said in a statement.
"The consequences of the sector's past over-expansion are still being accounted for, probably with some way still to go. The mistakes and vulnerabilities carried over from that period are both financial and cultural.
"The consequences of these mistakes have seen the reputation of the sector fall to new lows."
It confirmed plans were still progressing for the flotation of its Direct Line Group in the latter part of 2012.
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