Exxon earnings miss expectations
TAXPAYER-OWNED ROYAL Bank of Scotland has reported a 206 per cent rise in first-quarter profit to £792m as the bank continues its slow journey towards recovery.
The figure, well ahead of consensus forecasts, compares with a £259m profit in the same period in 2017 and comes after the lender booked a bottom-line annual profit for the first time in a decade earlier this year.
Operating profit in the period rose 70 per cent to £1.21bn and chief executive Ross McEwan said the results are a sign of the progress the bank is making.
He added: “In the first three months of 2018, we made a pretax profit of £1.2bn, up 70 per cent on the same period last year. This contributed to a bottom-line profit in the period of £792m, exceeding the full-year 2017 profit we reported back in February.
“This is a good set of results, showing the progress we are making, despite a more competitive market. Our income is up, costs are down and our capital has strengthened again.”
Friday’s numbers also show that RBS, still 72 per cent owned by the taxpayer, booked £209m in restructuring costs and £19m in conduct and litigation charges.
While the lender did not show any charges for PPI or provisions for GRG, its restructuring unit, it is yet to reach what is expected to be a multibillion-dollar settlement with the US Department of Justice over claims that it missold mortgage-backed securities in the run-up to the financial crisis.
The penalty is likely to dent the bank’s full-year performance but, once a settlement is reached, it will allow RBS to kick-start the process
The Government said last year that plans to reprivatise RBS were under way, with the aim of selling £15bn of its shares by 2023.
It wants to restart share sales in RBS by the end of the 2018-19 financial year and sell off £3bn a year over five years.
However, the Government faces a £26.2bn loss on its stake, with the lender’s shares languishing well below the average 502p share price paid during the bailout, at around 272p at today’s prices. of resuming dividends.
The bank also showed signs that cost-cutting is beginning to upset customers with its ‘net promoter score’, a measure of how likely customers are to recommend a brand, having fallen sharply as small business customers reacted badly to having their personal account managers replaced by call centres.
“The negative and deteriorating net promoter scores in NatWest branded business banking look awful,” analyst Joe Dickerson at Jefferies said.
Exxon posted first-quarter earnings of $4.65bn, missing analyst expectations despite rapidly rising crude prices.
Oil prices are on the rise after years in the doldrums, which has weighed on revenue and profit for Exxon and its peers. Profit at Exxon jumped 16 per cent and revenue rose 16.3 per cent to $68.21bn, which beat the previous market expectations of $66.07bn. Shares were down around three per cent in early trading.