Newspaper article The Evening Standard (London, England)

RBS Scrapes a Profit as Boss Warns of 'Marathon' Ahead

Newspaper article The Evening Standard (London, England)

RBS Scrapes a Profit as Boss Warns of 'Marathon' Ahead

Article excerpt

Byline: Nick Goodway

TAXPAYER-controlled Royal Bank of Scotland scraped into profit during the first half of the year, making just [pounds sterling]9 million.

The bank, which unlike its rivals reports every three months, said it swung from losses of [pounds sterling]248 million during the first three months to profits of [pounds sterling]257 million in the second quarter.

"We are on track and on schedule to deliver our far-reaching, five-year restructuring plan," said chief executive Stephen Hester.

"But the rebuilding of RBS is a marathon not a sprint."

The bank reported a pre-tax profit of [pounds sterling]1.14 billion, up from just [pounds sterling]15 million for the half, but Hester said the more realistic figure was the [pounds sterling]9 million attributable profit. "We basically broke even," he said.

RBS, which is 83% owned by the taxpayer, also announced the [pounds sterling]2 billion sale of its card-processing business to US private equity firms.

Coming on top of this week's [pounds sterling]1.65 billion sale of 318 branches to Santander and February's sale of its share of the Sempra commodities business to JP Morgan, RBS has now completed the vast bulk of the disposals ordered by the European Union in return for receiving state aid.

Hester warned investors that the improvement from here on would not necessarily come in a straight line.

He said: "There are all sorts of weird and wonderful accounting changes that whistle around banks when they are undressing in the way which we are.

"Our path to the sustainable profitability and other improvements we target will not be linear."

That is partly reflected by the fall in bad debts charges from [pounds sterling]2. …

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