Updated from 2:25 a.m. ESTEDINBURGH, Scotland ( TheStreet) -- Royal Bank of Scotland ( RBS), the U.K. bank 84%-owned by the government, narrowed its 2009 loss to 3.6 billion pounds ($5.52 billion) from a year-earlier loss of 24.3 billion pounds. RBS said its 2009 operating loss narrowed to 6.2 billion pounds from a year-earlier loss of 6.9 billion pounds. RBS said impairments rose sharply to 13.9 billion pounds from 7.4 billion pounds in 2008, "but now appear likely to have peaked." Fourth-quarter impairments were 5% lower than the third quarter and "risk elements in lending" at the end of 2009 were unchanged from 35 billion pounds at the end of September. The bank's core Tier 1 capital ratio improved to 11%. The bank's fourth-quarter loss was 765 million pounds, narrower than a loss of 1.8 billion pounds in the third quarter. -- Reported by Joseph Woelfel in New York. Follow TheStreet.com on Twitter and become a fan on Facebook.