RBS lending up; more branches to close
- Further branch closures “inevitable”, says CEO
- Lending to small firms up 29% in year to date
Royal Bank of Scotland today unveiled a third successive quarter of profits as it continued to recover from the 2008-09 crisis.
However, the latest figures include £400 million set aside to meet likely fines over foreign exchange dealings and a further £100m for mis-sold payment protection insurance.
As predicted, the bank has reversed its decision to sell Ulster Bank as a result of improving property conditions in Ireland.
Total net impairment provision releases amount to £801m, principally in Ulster Bank and RBS Capital Resolution, and litigation and conduct costs of £780m.
Operating profit was £1.277 billion compared with £1.318bn in Q2 and a loss of £155m in Q3 2013.
Ross McEwan, chief executive, said: “In February I placed trust at the heart of my new strategy for our bank. We have taken the first steps towards that goal, with early progress in making RBS simpler, clearer and fairer. We are reducing costs, and are on track to achieve our capital targets.
“UK and Ireland are showing signs of growth, and impairment trends are significantly better than we had anticipated at the start of the year.
“We have confirmed today that Ulster Bank remains a core part of our bank. We have a good market position and believe that, with investment, Ulster Bank can deliver attractive shareholder returns in the future.
“But we know we still have a long list of conduct and litigation issues to deal with and much, much more to do to restore our customers’ trust in us.”
During a morning conference call McEwan said lending to small firms was up 29% in the year to date.
He was reluctant to elaborate on the forex fine or whether staff (through loss of bonus) or taxpayers would pay. However, he said: “Those people who were responsible need to be accountable.”
He admitted the bank had closed 102 branches this year and further closures were “inevitable”, though he could not put a figure on it. Lloyds this week announced 200 branch closures and it is thought RBS has a lower target.
“If our customers are not using them unfortunately we do have to close them and put our money into other things.”
He said a deal with the Post Office meant customers had access to 11,500 extra outlets.