Royal Bank of Scotland profits triple
LONDON — Royal Bank of Scotland's first-quarter profit more than tripled as the one-time global powerhouse benefited from efforts to transform itself into a smaller institution focused on Britain.
The bank said on Friday that net income rose to about $2 billion from $663 million in the year-earlier quarter, a better than expected result. RBS lost $14.7 billion in the fourth quarter last year.
Citizens Bank — the Pittsburgh region's second-largest retail bank, with 132 branches — is part of RBS Citizens Financial Group in Providence, R.I., which is Royal Bank of Scotland's banking franchise in the United States.
Britain's government saved RBS in 2008 with a $76 billion bailout after its move to become the world's largest bank through a colossal spree of debt-fueled acquisitions. The rescue left taxpayers with an 81 percent stake.
CEO Ross McEwan, who took over as chief executive officer in October, said RBS is focused squarely on earning the “trust of our customers.”
McEwan is setting up an internal bad bank, combining divisions and scaling back the investment bank since the lender reported its biggest annual loss since the financial crisis in 2013. His efforts and those of his predecessor, Stephen Hester, to revive profit have been hampered by loan losses and the spiraling cost of redress for customers wrongly sold interest-rate swaps and payment-protection insurance.
“They are a good set of numbers,” said Vivek Raja, an analyst at Oriel Securities Ltd. in London with a “sell” rating on the stock. “The key thing is impairments, which really are better than expected across both the bad bank and the core bank — and the outlook is quite positive.”
RBS is being helped as the country's economy starts to grow and the housing market booms, helping to drive down bad debts.
RBS is preparing to sell shares in its Citizens Financial Group Inc. division in an initial public offering during the fourth quarter, though RBS would look “seriously” look at offers for the business, McEwan told reporters in a call on Friday.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Findlay company owed another $27M, judge decides
- Health insurers will refund $5.2M to Pa. subscribers, group plans
- Rising number of health care workers have less than 4-year degree, study shows
- Dick’s cuts PGA professionals as golf business declines
- Wabtec 2Q profit jumps 18.9%; raises forecast for year
- Wesco posts higher profit, lowers full year outlook
- EQT posts $110.9 million profit in latest quarter
- Europe thirsts for U.S. craft beer
- Study: Google dominates driverless car buzz
- 1,600 StubHub accounts breached, N.Y. official says
- Federal appeals courts disagree on Obamacare subsidies