RBS Swings to Better Than Expected Quarterly Profit
28 April 2017 - 5:00PM
Dow Jones News
By Margot Patrick
LONDON-- Royal Bank of Scotland Group PLC posted a bigger than
expected net profit in the first quarter and said it is still on
track for a full-year profit next year.
RBS has posted nine years of consecutive losses since being
bailed out by the U.K. government in the financial crisis, with
only a few profitable quarters along the way.
Net profit in the first three months of 2017 was GBP259 million
($334.24 million), compared with a GBP968 million net loss in
first-quarter 2016 and much higher than analyst expectations of
around GBP50 million.
The bank's core operations, stripping out units and assets it is
shedding, made GBP1.33 billion in pretax profit, up 30% on the
first quarter of 2016, mainly because of better conditions for
client trading in its shrunken markets business.
The U.K. government owns 70% of RBS after bailouts of the bank
in 2008 and 2009. Chancellor Philip Hammond said last week the
government may have to sell the shares for less than the GBP45.5
billion it invested. The bank's entire market capitalization is
currently around GBP30 billion.
The full-year net loss for 2016 was GBP6.96 billion. Chief
Executive Ross McEwan had previously said the bank should be
profitable by 2018.
One big hump to get over is a settlement with U.S. authorities
over its role in the sale of toxic mortgage-backed securities
before the financial crisis. RBS said Friday it is still in
discussions.
Write to Margot Patrick at margot.patrick@wsj.com
(END) Dow Jones Newswires
April 28, 2017 02:45 ET (06:45 GMT)
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