Bank says it is on target to hit goals

RBS runs up first quarter loss and sets aside £856m for fines

Ross McEwanRoyal Bank of Scotland has reported a loss f £446 million in the first quarter and set aside a further £856m to meet the cost of penalties and fines over mis-selling scandals.

The loss compares with a loss of £5.79 billion in the last quarter of last year and a profit of £1.2bn in Q1 2014.

It booked a loss of £122m on the sale of its Coutts international banking arm and £320m on the sale of Citizens, its US bank.

The underlying profit fell from £1.28 billion to £325 million in the corresponding period last year and a loss of £375m in the last quarter of 2014.

Adjusted operating profit was £1.63bn, up 16% from Q1 2014. These results continued to benefit from generally benign credit conditions, with a £91m net release of impairment provisions, and from continuing reductions in operating costs.

The bank, headed by chief executive Ross McEwan (pictured), said it was attracting more customers in personal and business banking amid improving credit conditions.

It insists it is on target to hit its goals for this year. The capital position has strengthened to a tier 1 ratio of 11.5%, up 30 basis points since the end of last year. RBS Capital Resolution, the “bad bank” looking after its toxic assets is on target to complete the disposal of non-core business.

McEwan told a media presentation: “We are pleased with the results at the operating level but neither you nor me are pleased with the loss.”

He said it was going to be “another tough year as we refocus the bank. There are still many conduct issues on the horizon.

“We look forward to the day when we can focus entirely on the future rather than deal with litigation issues.”

He said the plan was to create a simpler bank and that following work to improve the capital position  and accelerate the transformation of the core business the recovery was in the third phase: improving returns and getting beyond the exceptional items that overshadow the core business.


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