RBS profits riseafter cost cutting programme

More than £700m of costs stripped out this year Doubts on report predicting oil and gas jobs growth

Royal Bank of Scotland has posted its third consecutive quarter in the black after swinging to a third-quarter profit.

The bank, which is still 72% owned by the taxpayer, recorded a £392 million profit for the three months to September 30, which compares with a £469m loss in the same period last year.

Chief executive Ross McEwan again signalled that the lender is moving on from its troubled past.

He said: “Our strategy to deliver a simpler, safer, customer-focused bank, is working.

“We have grown income, reduced costs, made better use of our capital and continued to make progress on our legacy conduct issues.

“Our core bank continues to generate strong profits and we remain on track to hit our financial targets.”

Third-quarter adjusted operating profit came in at £1.2 billion compared with £1.3bn last year.

Mr McEwan has stripped out £708m in costs so far this year, with the lender on track to hit a £750m target for 2017.

RBS also detailed £125m in thirdquarter conduct and litigation costs and £244m in restructuring charges.

When added to costs booked in the first half, it takes the total for the year to date to £1.5bn.

The group has racked up several billion in litigation and conduct costs since it was rescued by the Government at the height of the financial crisis.

Earlier this year RBS agreed a £4.2bn US settlement over claims that it mis-sold toxic mortgage bonds in the run-up to the crisis.

However, it is yet to reach a separate settlement with the Department of Justice, which is expected later in the year, although Mr McEwan has warned there is a chance it could drag on into next year.

If a settlement is reached this year, it is likely to push the bank into a full-year loss.

However, Mr McEwan said that once a settlement is reached, it would give the Government an opportunity to look at selling down its holding in the bank.

The chief executive added that he was pleasantly surprised at the resilience of the economy, but warned an interest rate rise, which the market is expecting, will “have an impact for people with mortgages”.

The bank also said that it is reducing exposure to unsecured consumer lending as concerns continue to mount over a household debt boom.

On Thursday, the bank also paid out $44m (£33.4m) to settle a US criminal investigation that accused its traders of lying to customers over bond prices. Reports of renewed optimism in the North Sea should be treated with “scepticism and caution” according to a union boss.

New research by recruitment firms shows almost 90% of global employers surveyed expect staffing levels to increase or remain the same next year.

However, RMT regional organiser Jake Molloy said the industry is still suffering from redundancies.

“We’re not seeing anything that would suggest this level of optimism,” Mr Molloy said.

“Nothing at all. In fact, quite the reverse. We are seeing redundancies.

“I don’t get it at all and I would treat it with a degree of scepticism and caution.

“This paints a picture that is absolutely not the case and I would advise anyone reading it to do so with a degree of scepticism.”

The survey, by NES Global Talent and oilandgasjobsearch.com, claims to show that almost 60% of employers expect to recruit significantly over the next year.

Picture: PA. RBS is still 72% owned by the taxpayer.