RBS swings to profit in first quarter

Royal Bank of Scotland (RBS) saw its bottom line improve substantially in the first three months of 2013 as the preceding quarter was hit by a number of one-off costs.

Royal Bank of Scotland (RBS) saw its bottom line improve substantially in the first three months of 2013 as the preceding quarter was hit by a number of one-off costs.

The group reported an operating profit before tax of £826m in the first three months of the year, compared with a loss of £2,227m in the fourth quarter of 2012.

The last three months of 2012 were affected by several exceptional costs, including a negative own credit adjustment, compensation to pay for mis-sold Payment Protection Insurance and interest-rate hedging products, regulatory fines, write-down of goodwill and other intangible assets as well as integration and restructuring costs.

In the first quarter of 2012, the firm made a loss of £1,514m, dragged down by substantial own credit adjustments other costs.

Total income during the quarter ended March 31st 2013 came in at £5,850m, up from £5,760m in the fourth quarter but down from £7,131m a year earlier.

This year-on-year fall was mainly due to a reduction in Markets income reflecting RBS's "de-risking" activity as well as the impact of less attractive market conditions in the Rates business. Insurance net premium income also declined year-on-year owing to the "non-consolidation" of Direct Line which floated on the stock market in October.

"These results show pleasing progress in delivering a strong and valuable RBS for all our stakeholders," said Chief Executive Officer Stephen Hester.

"We are seeing the start of a pick-up in loan demand and have a strong surplus of funds ready and available to fully support economic recovery. Across the group we are working hard to improve what we do for customers and to better position the bank for future growth."

The firm expects to make continued good progress on all "safety and soundness" measures in 2013, including a full loaded Basell III core tier-one capital ratio of around 9.0% by the end of the year. This improved by 50 basis points to 8.2% in the first quarter.

Recommended

Get healthy returns from these three healthcare stocks
Share tips

Get healthy returns from these three healthcare stocks

Professional investor Paul Major of the BB Healthcare Trust highlights three of his favourite healthcare stocks.
25 Oct 2021
Share tips of the week – 22 October
Share tips

Share tips of the week – 22 October

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
22 Oct 2021
Three dividend stocks from the dynamic Asia/Pacific region
Share tips

Three dividend stocks from the dynamic Asia/Pacific region

Professional investor Sat Duhra of the Henderson Far East Income investment trust highlights three of his favourite stocks.
18 Oct 2021
Share tips of the week – 15 October
Share tips

Share tips of the week – 15 October

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
15 Oct 2021

Most Popular

Properties for sale for around £1m
Houses for sale

Properties for sale for around £1m

From a stone-built farmhouse in the Snowdonia National Park, to a Victorian terraced house close to London’s Regent’s Canal, eight of the best propert…
15 Oct 2021
How to invest as we move to a hydrogen economy
Energy

How to invest as we move to a hydrogen economy

The government has started to roll out its plans for switching us over from fossil fuels to hydrogen and renewable energy. Should investors buy in? St…
8 Oct 2021
Emerging markets: the Brics never lived up to their promise – but is now the time to buy?
Emerging markets

Emerging markets: the Brics never lived up to their promise – but is now the time to buy?

Twenty years ago hopes were high for Brazil, Russia, India and China – the “Brics” emerging-market economies. But only China has beaten expectations. …
18 Oct 2021