Royal Bank of Scotland, which owns Rhode Island-based Citizens Bank, unveiled the biggest loss in British corporate history on Monday, overshadowing a second government bailout for the sector and sending its shares reeling to a 23-year low.

RBS said it would report a 2008 loss of up to 28 billion pounds ($41 billion), driven largely by a goodwill impairment charge of 15 billion to 20 billion pounds related to its acquisition of parts of Dutch rival ABN AMRO in 2007.

Excluding goodwill impairment, the bank said in a statement it expects a full-year loss of 7 billion to 8 billion pounds.

The statement came as the U.K. government sought to counter a looming recession by unveiling a new rescue package for banks that will see its stake in RBS rise to nearly 70 percent from 58 percent.

The latest bailout failed to support shares in Lloyds Banking Group, however, as they made their debut on the London Stock Exchange. Traders said the package had been overshadowed by fears that the massive losses at RBS would set a precedent for the rest of the sector.

Lloyds Banking Group (LBG), created by Lloyds TSB’s rescue of leading mortgage lender HBOS, said on Monday Lloyds had traded satisfactorily and that HBOS’ trading position was unchanged since their last update in December.

Shares in LBG initially rose more than 7 percent following the trading update and the government’s latest bid to bolster bank capital and lending, but the stock was down 9 percent at 89.5 pence by 1055 GMT.

David Buik, partner at BGC Partners, said there was a certain "inevitability" to the LBG share price fall. "The fact that in terms of ownership they have 28 percent of the mortgage market and house prices are falling makes them vulnerable," he said.