The Courier & Advertiser (Perth and Perthshire Edition)
RBS profit is ‘milestone’ in bank’s recovery
FINANCE: Barclays also declares Q1 profit, while Government sells down Lloyds stake
RBS has reported its first quarterly profit since 2015, with chief executive Ross McEwan hailing the results as a “major milestone”.
The taxpayer-owned lender booked a £259 million profit in the first three months of the year, compared with a £968m loss in the same quarter last year.
It is the first time since the third quarter of 2015 that RBS, which is 72% owned by the Government, has turned a quarterly profit.
The numbers will come as a relief to Mr McEwan, who has presided over a string of recent poor results, which total £58 billion of losses since RBS was bailed out by the government in 2008.
Mr McEwan said: “These results reflect very much what we talked about at full year. This bank has a very strong core with great potential, and we believe that, by going further on cost reduction and faster on digital transformation, we will deliver a simpler, safer and even more customer-focused bank, with a compelling investment case.”
The core bank’s adjusted operating profit also rose in the quarter, from £303m to £1.3bn, while the group also booked £577m in restructuring costs.
In February, Mr McEwan ordered a £2bn four-year cost-cutting drive which is expected to result in significant job losses and branch closures.
To this end, the bank took £278m in costs out of the business in the period.
Last week, Chancellor Philip Hammond said the Government is prepared to sell its £45bn stake in RBS at a loss to the public purse.
However, it is understood a sale will only commence once RBS’s legacy issues, such as fines in the US and state aid obligations, are dealt with.
Asked whether the bank owes the public an apology in light of the Chancellor’s comments, Mr McEwan said: “I don’t think it’s a matter of an apology, we just have to go back to when the government stepped in.
“The price that was paid was the price of the day.
“It was the right thing to do to save the bank.”
The results came as it was revealed the taxpayer stake in rival Lloyds Banking Group has been cut to below 1%.
UK Financial Investments, which manages the stake in Lloyds, cut its holding by around 1% to 0.89%.
The Government has recouped the £20.3bn used to bail out Lloyds during the financial crisis.
Meanwhile, Barclays CEO Jes Staley has moved to quell shareholder unrest over his conduct, insisting he has the full backing of the board as the lender posted a doubling of first quarter profits.
Investors have been urged to abstain from a vote backing his re-election at the bank’s May 10 AGM after it emerged Mr Staley was being investigated by regulators for breaking rules designed to protect whistleblowers’ anonymity.
The bank was instead keen to draw focus to strong first quarter results, which saw profits more than double as its major restructuring programme draws to a close.
The lender said group pre-tax profit surged to £1.68bn in the three months to March 31, up from 793m during the same period last year.