EDINBURGH - Bad debt provisions are trailing downward in an environment of slow economic improvement, said Robert Speirs, finance director of Royal Bank of Scotland Group PLC.
"We expect to see bad debt provisions falling off, but we don't want to be complacent because another downturn in the economy would give us a problem," he said in an interview.
Mr. Speirs said he believed the recession had bottomed out, but did not see a real acceleration in recovery.
"We are coming out slowly, and there are stutters," he said.
May Stimulate Recovery
There was still concern over any real "push" behind the economy, which might need a further interest rate reduction to stimulate recovery.
"We think an interest rate cut may be needed," he said. "Our balance sheet is positioned so that a cut of one percentage point would not have a significant long-term impact."
Mr. Speirs said Royal Bank's five-year Columbus Project was moving along on target, with 3,500 job reductions envisaged by the end of 1997.
"It will give us some early wins and some cost reduction overall," he said.
In areas like its Direct Line car and house insurance group and its Citizens Financial subsidiary in the United States, more staff would be added.
He said Royal Bank had less fat to trim than its competitors and had more to do on the income side of its cost-income ratio. …