RBS posts its first profit in 10 years

Brunilde Fioravanti
Febbraio 23, 2018

Royal Bank of Scotland Group (RBS.L) reported its first full-year profit since 2007 on Friday, but the symbolic moment was bitter-sweet for the bank which had hoped to get a multi billion-dollar misconduct charge out of the way instead. The bank is still awaiting the outcome of a US Department of Justice investigation into the mis-selling of mortgage-backed securities in the run-up to the financial crisis and has already set aside billions of pounds in anticipation of a hefty penalty.

The bank recorded a net profit of £752 million ($1.05 billion) for 2017, surpassing analyst forecasts for a figure of £592 million. Some analysts have predicted the DoJ fine could be higher than £5bn. It had hoped to settle the USA mis-selling charges, the bank's last large remaining misconduct issue, in 2017. Since 2008, RBS has booked 58 billion pounds in losses. If it had, this would have resulted in the bank's 10th consecutive annual loss.

The bank did not provide an update on the timing of the settlement, its last large remaining legacy issue.

"The number of legacy issues the bank faces has reduced", chief executive Ross 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", he said.

The issue weighs on RBS's share price and complicates the government's plan to sell down its 71 percent stake in the bank.

That effort included putting aside a further £764m of litigation and conduct costs in the fourth quarter of 2017, including £175m added to the bill for the mis-selling of payment protection insurance (PPI) in the United Kingdom and £135m for "legacy issues" including tracker mortgages in the Republic of Ireland.

RBS said it had beaten its overall cost reduction target of 750 million pounds in 2017, taking out 810 million pounds.

Altre relazioniGrafFiotech

Discuti questo articolo

Segui i nostri GIORNALE