Thursday 22 February 2018

RBS Treasury payment doubles losses to over €1bn

Ross McEwan, chief executive officer of the Royal Bank of Scotland Group Plc (RBS)
Ross McEwan, chief executive officer of the Royal Bank of Scotland Group Plc (RBS)

Royal Bank of Scotland has reported a first-quarter pre-tax loss of £968m (€1.24bn) - more than double last year's figure of £446m.

The loss reflects the impact of its £1.2bn payment last month to the Treasury to buy out a crucial part of its £45bn bailout.

The payment ended a dividend access share (DAS) agreement with the Government which was put in place in 2009 and prevented it paying dividends to any shareholders before the Treasury.

The bank said: "RBS remains on track with its plan to build a strong, simple, fair bank for customers and shareholders."

Income fell from £3.5bn to £3bn following the sale of its Citizens business in the US and the decision to dramatically scale back its overseas and investment banking offering.

The cost of restructuring the bank came in at £238m, with RBS expecting the number to grow to £1bn for the year.

RBS chief executive Ross McEwan said: "Today's results show the strength and resilience of the bank we are fast becoming. This bank has great brands and great market positions and, piece by piece, we are building a solidly performing, profitable bank doing great things for customers and returning value for shareholders.

"One quarter in, capital remains strong, costs continue to fall, our customer scores are improving and we're seeing growth in the businesses and the markets we like."

On Thursday, RBS warned of a greater-than-expected hit from plans to spin off its Williams & Glyn arm.

The group, which is 73pc owned by the taxpayer, also said there was a "significant risk" that it would not meet the deadline to separate the 316-branch Williams & Glyn business by the end of 2017.

It is now looking at other ways to spin off the business, adding that the "overall financial impact on RBS is now likely to be significantly greater than previously estimated" due to complexities of separating the business.

Press Association

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