Wednesday, 24 October, 2018

RBS posts its first profit in 10 years

Royal Bank of Scotland | Reuters File Royal Bank of Scotland | Reuters File
Nellie Chapman | 23 February, 2018, 14:25

He added: "All in all, it's been a tricky but momentous year for RBS, in which the bank has put to bed numerous legacy issues which have hampered performance since the financial crisis".

The figure compares to a £6.95bn loss which the lender reported a year ago, which was one of the biggest since its Government bailout in 2008, as it dealt with conduct charges, legacy and restructuring costs.

The bank in July reached a $5.5 billion settlement in the United States with the Federal Housing Finance Agency over the mis-selling of residential mortgage-backed securities, but the outstanding issues with the Department of Justice are still pending.

The bank has already set aside $4.4 billion for a potential settlement, "still leaving it well short of what the total bill might be", Hewson added.

Adjusted earnings per share were 3.0 pence, compared to 7.0 pence past year.

Chief executive, Ross McEwan, declared it a "symbolic moment" and an indication the banks was "putting the past behind us".

That's because the bank is still being investigated by the US Department of Justice over claims that it sold toxic mortgages prior to the global financial crisis.

"The number of legacy issues the bank faces has reduced", RBS said in its results statement.

"We have been constantly hit with the sins of the past with conduct and litigation issues and I've been heavily restructuring the business to bring it back to the UK", Mr McEwan said.

"With many of our legacy issues behind us, the investment case for this bank is much clearer and the prospect of returning any excess capital to shareholders is getting closer". "The timing of the resolution of this issue is not in our control".

"To those customers who did not receive the experience they should have done while in GRG we have apologised".

The bank is hoping to rebuild its reputation after a series of scandals, including the revelation that it deliberately mistreated thousands of struggling small business customers that came to it for financial assistance in the wake of the banking crisis.

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