Royal Bank of Scotland share price falls after posting “symbolic” first profit since financial crash
Royal Bank of Scotland this morning reported its first annual profit since 2007.
The state-backed lender posted returns of £752m, well ahead of analyst expectations. But shares fell as markets opened, dropping by almost four per cent.
Chief executive Ross McEwan said he was “pleased” the group had posted a profit, adding:
This is a symbolic moment for the bank and a clear indication of the progress we continue to make in putting the past behind us, while at the same time investing to build a bank which delivers for both customers and shareholders.
RBS reported losses of £7bn in 2016.
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McEwan highlighted the “progress” made over the last few years, with the bank now operating in 12 countries rather than an unwieldy 38. RBS stripped £820m of costs from its business in 2017, taking total savings to £3.9bn over the last four years.
He the BBC Today programme: “RBS was the largest bank in the world 10 years ago, with a balance sheet of £2.2trillion, and it spectacularly fell from grace.
“We’ve been restructuring the bank, but it’s taken time and a lot of cost to come out of countries and businesses we didn’t want to be in.”
Analysts had pencilled in losses of around £592m, according to consensus forecasts. However, Royal Bank of Scotland’s big beat was driven by multi-billion dollar fines from the US Department of Justice not appearing during the year. With some analysts including them, expectations varied widely.
McEwan said: “We have been heavily hit with the sins of the past, and still have one large litigation and contract issue with the US Department of Justice.”
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