RBS returns to the black with £752m profit

RBS posts first profit in a decade

Commenting on media reports that the Royal Bank of Scotland (RBS) has returned to profit for the first time in a decade as it continues its recovery, Western Isles MP Angus B MacNeil said: "It is good to see the RBS returning to profit".

Adjusted operating profit fell to 512 million pounds from 1.19 billion pounds a year ago.

RBS shares have climbed almost 4 percent since the beginning of the year.

Still 71 percent owned by the government, RBS is still facing potential fines from the US's Department of Justice following the sale of financial products that were linked to risky mortgages.

Ross McEwan, CEO of RBS, said: "We have achieved profitability through delivering on the strategic plan that was set out in 2014".

McEwan also hinted at a resumption of dividends at the group in the future following the much better financial performance.

RBS set aside another £764mln provision in the fourth quarter, including £442mln towards USA mortgage litigation suits from the DoJ and other investigations.


RBS said it had beaten its overall cost reduction target of 750 million pounds in 2017, taking out 810 million pounds. 'We will await the resolution of the US RMBS settlement before deciding whether it is appropriate to take a more active stance, ' he says.

Shares in the bank fell nearly 4% in early trading after failing to meet City expectations, making it the biggest faller on the FTSE 100.

That is still well adrift of the taxpayer's buy-in price of up to £5, and analysts said as and when the government began selling down the stake again it would put further pressure on the price. This compares to a GBP6.96 billion loss in 2016.

The company disclosed that it had booked litigation and conduct costs of £764 million in the fourth quarter, including a £442 million over mortgage-backed securities investigations in the U.S., taking its total provision for the issue to £3.2 billion. Bank of America upgraded Royal Bank of Scotland Group from an "underperform" rating to a "neutral" rating in a research report on Tuesday, February 6th.

However, the RBS boss would not give clues over what this would mean for branch closures or jobs cuts.

He said: "One the issue of digitalisation, you'll recall in the last four to five years I've never given what the impact on our headcount (is)". The financial services provider reported $0.08 earnings per share for the quarter, Morningstar.com reports. Millennium Management LLC boosted its position in Royal Bank of Scotland Group by 16.9% during the 4th quarter.

Its annual report, published alongside the results, showed that Mr McEwan's total pay package fell to £3.49 million from £3.7 million in 2016 following a decrease in his benefits and long-term incentives. RBS said it would invest 1.5 billion pounds more than previously forecast in the next two years, around 800 million pounds of which will go towards digitisation.

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