RBS share price starts down despite first-half profit increase of 93 per cent
The Royal Bank of Scotland shrugged off PPI write downs to record a huge jump in profit before tax.
The figures will come as no real surprise as RBS gave accurate guidance on its first-half expectations a week ago and saw its share price rocket as a result. This explains why the markets have not reacted strongly to today's announcement.
Profit before tax was up 93 per cent to £2.6bn, while operating profit also saw large gains, moving from £708m to £2.6bn, a rise of 267 per cent
Ross McEwan, Chief Executive, said:
The results show the steady progress we are making as we take the steps to be a much simpler, smaller and fairer bank. These results show that underneath all the noise and huge restructuring of recent years, RBS is a fundamentally stronger bank that can deliver good results for customers and shareholders.
There is progress on all of our key priorities – capital is stronger, costs are lower and customer activity is gradually improving – although we have only just started with our programme to make it easier for customers to do more business with us.
But let me sound a note of caution. We are actively managing down a slate of significant legacy issues. This includes significant conduct and litigation issues that will likely hit our profits going forward. I am pleased we have had two good quarters, but no one should get ahead of themselves here – there are bumps in the road ahead of us.
These results are pleasing, but no one at this bank is complacent about the challenges ahead.
The results come on the back of underwhelming figures from Lloyds yesterday, which showed it had put aside a further £600m as a result of the PPI mis-selling scandal.