Royal Bank of Scotland boss Stephen Hester said Thursday there was 'important work still to do' as the company released its annual results.
The bank beat analysts' expectations, posting core operating profits of £6.3bn for 2012, up 5.0% from the year before, with retail and commercial down 6.0% but markets improving by 68%. Nomura had pegged core profits at £6.1bn.
Group operating profit almost doubled year-on-year as it climbed from £1.8bn to £3.4bn, buoyed by core growth and a 32% reduction in non-core losses.
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Non-Core operating losses came to £2.8bn, £1.3bn lower than 2011, mainly due to a significant fall in impairments in the company's commercial subsidiary, Ulster Bank, and other real estate portfolios.
The results come as the bank undergoes a massive restructuring and tries to rework its image following a LIBOR rigging scandal. The company agreed to pay penalties of £87.5m, $325m, and $150m to the Financial Services Authority (FSA), Commodity Futures Trading Commission (CFTC) and Department of Justice (DOJ), respectively.
In an effort to cut costs after being bailed out by the government in 2008, the bank was said to be considering a hybrid sale of more than 300 branches to private equity firms and institutional investors.
The bank was also rumoured to be selling its US retail arm Citizens to offset its debts. In a statement alongside its financial results, the board said it had decided it was the right time to begin work on a partial flotation of Citizens in the next two years.
Chief Executive Officer, Hester, admits the bank has plenty of work to do before it bounces back but is making progress.
"RBS is four years into its recovery plan and good progress has been made," he said.
"We are a much smaller, more focused and stronger bank. Our target is for 2013 to be the last big year of restructuring. There will be important work still to do, but an increasingly sound base from which to work. As the spotlight shifts to the 'new RBS' post restructuring, we are determined that it will show a leading UK bank striving to be a really good bank. By serving customers well RBS can become one of the most respected, valued and stable of banks. That is our goal."
RD
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