UPDATE 1-RBS restores customer service after technical glitch
* Customers hit by technical problems Wednesday evening
* RBS says services are now back to normal
* RBS says hardware fault caused problems
* RBS says failure was 'unacceptable'
By Matt Scuffham
LONDON, March 7 (Reuters) - Royal Bank of Scotland said all systems were back to normal on Thursday after overnight computer problems caused disruption for customers for the second time in nine months.
RBS, 82-percent owned by the UK taxpayer, apologised for Wednesday evening's disruption in a statement to allay fears that customers could suffer a repeat of a June system failure which left millions unable to make or receive payments.
"We are disappointed that our customers have faced disruption to banking services for a period yesterday evening, and apologise for that," RBS said in a statement.
The technical problems in June cost RBS 175 million pounds ($263 million) to rectify and Chief Executive Stephen Hester chose to waive his bonus to appease customers.
Wednesday's problems left some customers of RBS and its NatWest and Ulster Bank divisions unable to withdraw cash, pay for goods or use telephone and online banking services.
RBS said services were disrupted between 2100 GMT and 2300 GMT on Wednesday as a result of a hardware fault. The bank said the issues were not the same as last year, when problems were caused by a software upgrade which went wrong.
RBS said the failure was "unacceptable" and advised customers left out of pocket to get in touch with their bank.
Shares in RBS were down 1.1 percent at 1245 GMT, compared with a 0.2 percent rise across the European bank sector.
"We believe that the increased frequency of IT problems may damage the reputation of the bank and reduce the goodwill of its customers and even force them to switch to a different bank," said analysts at Mediobanca Securities.
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