NWG Natwest Group Plc

By Adam Clark

Royal Bank of Scotland Group PLC (RBS.LN) beat market expectations for its first-quarter profit but warned Brexit uncertainty is likely to weigh on short-term revenue growth.

The U.K. bank said Friday that it made a quarterly pretax profit of 1.01 billion pounds ($1.30 billion), down from GBP1.21 billion in the year-earlier quarter. Net profit fell to GBP707 million from GBP808 million.

RBS said the profit fall was largely due to lower income but the results were ahead of market expectations. Analysts had forecast an operating profit of GBP900 million and a net profit of GBP546 million, according to company-compiled consensus.

Revenue dropped to GBP3.04 billion from GBP3.30 billion, driven by lower net interest income. RBS's net interest margin --the difference between what it earns on lending and pays for funding-- declined to 1.89% from 1.95% in the preceding quarter.

"While we retain the outlook guidance we provided in the 2018 Annual Results document, we recognize that the ongoing impact of Brexit uncertainty on the economy, and associated delay in business borrowing decisions, is likely to make income growth more challenging in the near term," RBS said.

The bank's Common Equity Tier 1 ratio--a key measure of balance-sheet strength--remained stable at 16.2%.

Write to Adam Clark at adam.clark@dowjones.com

(END) Dow Jones Newswires

April 26, 2019 02:38 ET (06:38 GMT)

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