More than £1.5 billion was wiped from the value of Royal Bank of Scotland after the troubled group posted bigger-than-expected losses.

The promise of a new strategy at RBS failed to impress investors with shares ending 8% lower. The FTSE 100 Index recovered from a weak start to close 11.1 points higher at 6810.3. The pound held firm against the US dollar and euro at 1.67 and 1.22 respectively.

Part-nationalised RBS led the fallers board by some distance as its shares dived 27.4p to 326.6p. IG client manager Will Hedden said: "It is still hard to see the light at the end of the tunnel of nationalisation as a sixth straight annual loss misses expectations and highlights the job that still remains. One has to feel that the continued political fever created by bonus-paying at the investment bank has kept many investors away."

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RSA Insurance was also sharply lower after former RBS boss Stephen Hester axed the company's dividend and launched plans to raise £775 million through a rights issue equivalent to 20% of its market value. With operating profits for 2013 down to £286m from £601m a year earlier, shares slumped 4.1p to 98.1p, a fall of 4%.

Other insurers were also under pressure as the sector counts the cost of a rising bill for flood claims and difficult conditions in the motor insurance market.

Aviva was 3.9p lower at 469.1p, while Admiral was 15p cheaper at 1433p.

Alton Towers and Madame Tussauds owner Merlin Entertainments cheered a "landmark year" after profits surged by a third and visitor numbers reached nearly 60 million following the launch of new rides.

In its maiden set of results as a listed company, Merlin said underlying pre-tax profits rose to £186m for the year to December 28, up from £140m in 2012 and said it had attracted 10.7% more visitors. There was a 6.7% hike in like-for-like revenues, with total sales of £1.2 billion. When Merlin floated on the stock market three months ago it was initially valued at £3.2bn, and has since seen its shares jump by a fifth. However they eased back 1.6% yesterday and were down 6p to 365p. Advertising and marketing giant WPP fell 46p to 1285p after it trimmed earnings guidance.

Shares in Whitbread rose after the Costa coffee and Premier Inn hotel chain operator said it expected to post full-year results towards the top end of expectations. Shares rose 206p to 4397p as it said like-for-like sales rose 6.8% in the 11 weeks to February 13.

Outsourcing group Capita led the risers board as it said pre-tax profits rose 14% to £475m in 2013 and revealed £3.3bn in contract wins, with a £5.5bn bid pipeline. Shares were 73p higher at 1158p.

The biggest FTSE 100 risers were Capita up 73p at 1158p, Whitbread ahead 206p at 4397p and Rolls-Royce.

The biggest fallers were Royal Bank of Scotland down 27.4p at 326.6p, RSA Insurance off 4.1p at 98.1p, and WPP down 46p at 1285p.