London market stuck in red as RBS shares fall

The London market failed to bounce back yesterday as investor fears over an impending US fine sent shares in Royal Bank of Scotland tumbling.

The FTSE 100 Index closed down 7.98 points to 7,244.41, with RBS unable to string together a rally despite reporting a bottom-line profit for the first time in a decade.

The lender swung out of the red to report a £752 million profit for 2017, marking a major improvement on the £6.95 billion loss which the lender reported a year ago – one of the biggest since its Government bailout in 2008.

RBS, which is 72% owned by the taxpayer, has yet to reach what is expected to be a multibillion-dollar settlement with the US Department of Justice (DOJ) over mortgage-backed securities sales.

Shares were down 4%, or 13.6p, to 268.4p.

Across Europe, Germany’s Dax and the Cac 40 in France were both 0.2% higher.

On the currency markets, the pound was 0.2% ahead against the US dollar at 1.397, with Bank of England official David Ramsden saying clarity over Britain’s relationship with the EU after Brexit would boost productivity growth.

Mr Ramsden, deputy governor for markets and banking, warned that uncertainty surrounding the arrangements was causing businesses to put their investment plans on hold.

Versus the euro, sterling was up 0.4% at 1.136.

The price of oil surged 1.5% to 67.12 as traders responded to production slipping in Libya after the El Feel oilfield was shutdown.