Change of name
RBS doubles profit and demotes brand in favour of NatWest
The RBS name was removed from the bank’s London head office in 2017
Royal Bank of Scotland has doubled its bottom line profit and is to rename the parent company NatWest Group in a controversial move to demote its historic brand.
The bank also confirmed it would work towards ending its funding to coal, oil and gas companies that do not comply with commitments to meet carbon targets.
Chairman Howard Davies today said the change of name would bring the group into line with the largest part of its business, although analysts will say it is part of a move to distance the bank from the damage to the RBS brand during the financial crisis.
About 80% of group’s customers are now with NatWest and there is said to be no impact for those who will continue to be served through existing brands, nor will it influence the location of the head office.
The chairman said: “The board has decided that it is the right time to align the parent name with the brand under which the great majority of our business is delivered.
“Customers will see no change to products or services as a result of this change and will continue to be served through the brands they recognise today.”
A change of name has been discussed by the board for at least two years. RBS rescued what was then a battered NatWest brand almost 20 years ago.
Despite his reasons for changing the name in line with customer growth, in 2018 the chairman said the current name was weighing on attempts to revive its fortunes and may have to be ditched.
The bank today reported further progress. Attributable profit almost doubled (up 93%) to £3.1 billion from £1.6bn in 2018. Full year operating profit came in 26% higher at £4.2 billion. It also announced a dividend of 8p of which 3p is the proposed final dividend and 5p a special dividend.
Former CEO Fred Goodwin seen on Friday leaving the Balmoral Hotel in Edinburgh where he had been attending a charity lunch (pic: Terry Murden)
Conduct and litigation costs came in a £85m for Q4 but there were no new provisions for mis-sold payment protection insurance following the deadline for claims last August. However, there were Impairments of £696m against £398m at FY 2018 due to one-offs in commercial business.
The bank’s common equity tier 1 ratio – a measure of its capital reserves – will be 16.2%, post dividend.
The bank is targeting £250m in cost savings this year, but declined to reveal any impact on jobs.
New chief executive Alison Rose, announcing her maiden results, said she intends to cut down under-performing investment bank NatWest Markets.