RBS posts its first annual profit in a decade
Royal Bank of Scotland (RBS), majority-owned by British taxpayers, has posted a net profit of £752m for 2017, its first annual gain in a decade.
The result surpassed analyst expectations of £592m and compares with a £6.95bn loss a year earlier, when RBS was hit by conduct charges and legacy and restructuring costs.
CEO Ross McEwan hailed the announcement as “a really symbolic moment” as the bank continues its ongoing recovery from the 2008 crash.
“Our financial strength is much clearer ... We still have more to do in cost reduction, however this reflects
progress we have made in making the bank more efficient,” he said.
The bank remains 72 per cent-owned by the UK Government after it received a £45.5bn bailout at the height of the financial crisis.
Prior to that, RBS had been one of the biggest retail banks in the world, with a balance sheet of around £2.2 trillion – a total that has since dropped to £750bn, according to its chief executive.
One cloud still casting a shadow over its prospects is an outstanding dispute with the US Department of Justice over claims it missold financial products tied to risky mortgages, which could see it facing a heavy fine.
RBS put aside £764m in the fourth quarter of last year with a view to tackling the issue. The bank did succeed in implementing major cost-cutting measures in 2017, reducing expenses by £810m and beating its original target of £750m.
“We’ve been restructuring the bank to be a really good UK and Republic of Ireland business,” Mr McEwan told the BBC. “It’s taken time but it’s also taken a lot of cost to come out of countries and businesses that we just didn’t want to be in. We are now operating in 12 countries as opposed to what was 38, so very we’re focused on the UK.”