RBS Reports Loss, To Miss Long-Term Targets
October 28 2016 - 3:07AM
Dow Jones News
By Max Colchester
Royal Bank of Scotland Group PLC said it may miss its long-term
financial goals after slumping to a net loss in the third quarter
partly on a provision for U.S. legal settlements.
The bank, 73% owned by the British government, said on Friday it
fell to a GBP469 million ($570.3 million) loss in the three months
to end-September from a GBP960 million profit in the same period
last year. Revenue was up slightly at GBP3.3 billion from GBP3.1
billion in the third quarter last year.
The British bank incurred several one-off items including a
GBP425 million legal provision, mainly related to settlements with
U.S. authorities over the sale of mortgage-backed securities.
The bank signaled that it was unlikely to meet long-term
financial targets because of low interest rates.
"We now don't expect to achieve these by 2019 as previously
indicated," the bank said in a statement.
The bank also confirmed that it won't meet a 2017 deadline to
separate its Williams & Glyn unit. The bank must dispose of
Williams & Glyn by the end of 2017 to meet European state aid
rules following RBS's bailout in 2008. Earlier this week CYBG PLC
said that it has made a preliminary nonbinding proposal for the
branches. RBS is now in discussion with the U.K. Treasury on how to
proceed with negotiations with the European Commission.
Problems at Williams & Glyn would push expected
restructuring charges up by GBP500 million for the year, RBS
said.
The bank spent GBP469 million on restructuring its business in
the quarter. It also wrote down the value of its deferred tax
assets.
"The timing of returning excess capital to shareholders through
dividends or buybacks remains uncertain," the bank said in a
statement.
Write to Max Colchester at max.colchester@wsj.com
(END) Dow Jones Newswires
October 28, 2016 02:52 ET (06:52 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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