Royal Bank of Scotland Swings to 3Q Pretax Loss After Higher PPI Costs
24 October 2019 - 6:01PM
Dow Jones News
By Sabela Ojea
Royal Bank of Scotland Group PLC (RBS.LN) on Thursday reported a
swing to a pretax loss for the third-quarter after booking extra
PPI costs following a late surge in claims ahead of the August
deadline, as previously guided.
The majority-state-owned bank booked a 900 million pound ($1.16
billion) provision to cover payment protection insurance costs. It
said in September that the bank expected to book a provision of
GBP600 million to GBP900 million.
The London-listed lender made an pretax loss of GBP8 million for
the quarter ended Sept. 30, compared with a profit of GBP961
million in the year-earlier period, after returning to
profitability in 2017.
RBS's net loss came to GBP315 million, compared with a profit of
GBP448 million a year earlier.
Total income for the quarter fell to GBP2.90 billion from
GBP3.64 billion in the year-earlier quarter.
Net interest income fell to GBP2.01 billion from GBP2.15 billion
a year earlier. RBS said its net interest margin, the difference
between the money it earns on lending and pay out on funding,
decreased by seven basis points compared with the second
quarter.
RBS ended the quarter with a common equity Tier 1 ratio--a key
measure of balance-sheet strength--of 15.7%, which included a 50
basis point reduction in respect of the PPI charge.
The bank also reaffirmed its previous outlook guidance for the
full year, with revenues forecast to be GBP12.31 billion, taken
from FactSet and based on 15 analysts' estimates.
Write to Sabela Ojea at sabela.ojea@wsj.com; @sabelaojeaguix
(END) Dow Jones Newswires
October 24, 2019 02:46 ET (06:46 GMT)
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