RBS Posts First Half-Year Profit in Three Years
August 04 2017 - 3:26AM
Dow Jones News
By Max Colchester
Royal Bank of Scotland Group PLC swung to a net profit for the
first half of 2017, as a series of one-off costs melted away.
The 71% state-owned bank said Friday that revenue came in at
GBP6.91 billion, compared with GBP6.06 billion ($7.96 billion) the
year before, on the back of stronger mortgage lending. The bank
made a net profit of GBP939 million, versus a GBP2.05 billion loss
in the first half of 2016, when the bank paid the government over
GBP1 billion to regain the right to pay dividends. This was its
first half-year profit in three years.
The U.K. bank said restructuring costs continued to rise in the
first six months of 2017, as it pursues a multiyear turnaround to
shed businesses and refocus on the U.K.
Litigation costs came in at GBP400 million, as the bank paid to
settle disputes with U.S. authorities and a class action by
shareholders.
The results come as the bank targets returning to full-year
profitability in 2018, a decade after its taxpayer bailout.
In recent months, the bank has made strides to clean up some of
the legacy issues hanging over it. In July, RBS agreed to pay $5.5
billion to the U.S. Federal Housing Finance Agency to settle a
probe into its sale of toxic mortgage-backed securities in the run
up to the financial crisis. The bank also reached a preliminary
agreement with the European Commission to spend over $1 billion to
boost competition in the U.K. The agreement came after RBS was
found in breach of European competition rules following its
bailout.
Three major hurdles remain before the bank returns cash to
shareholders: RBS needs to convincingly pass a balance sheet stress
test; it needs to settle criminal and civil investigations with the
U.S. Justice Department over its role in packaging subprime
mortgages and it needs to make a profit. The bank says it still
hasn't had any update from the Justice Department on when a
settlement might come.
The bank also said Friday that it would repurpose its Dutch
banking license so that its investment bank could service customers
on the continent after Brexit. The bank expects less than 150 roles
to move overseas.
Write to Max Colchester at max.colchester@wsj.com
(END) Dow Jones Newswires
August 04, 2017 03:11 ET (07:11 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Royal Bank of Scotland (NYSE:RBS)
Historical Stock Chart
From Mar 2024 to Apr 2024
Royal Bank of Scotland (NYSE:RBS)
Historical Stock Chart
From Apr 2023 to Apr 2024
