The bank is still being hit by litigation and restructuring costs and it was relieved to not have to pay a
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RBS is back in the black but it still has some huge issues looming over it
The Royal Bank of Scotland swung back into the black in the first quarter — the first time since 2015 — but it is not as positive as it looks.
Ross McEwan, Chief Executive of RBS (Royal Bank of Scotland).
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- Restructuring costs
- Litigation and conduct costs
- money set aside for legal issues and compensation —
- £54 million "comprised a number of small charges."
"These results reflect very much what we talked about at full year. Firstly, a strong and improving core bank and secondly, fewer remaining legacy issues. Core income is up on last year, adjusted costs are down, and we’re making better use of capital," said RBS CEO Ross McEwan.
"This bank has a very strong core with great potential, and we believe that by going further on cost reduction and faster on digital transformation – we will deliver a simpler, safer and even more customer-focused bank, with a compelling investment case."
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RBS still has a lot of issues to tackle
Although the Q1 results do not look too bad in isolation, you have to look at the long-term trend.
The results come after RBS reported its ninth consecutive year of losses, in February, and said it would not make a profit until 2018.
The bank said in its full year financial results statement that it lost £6.955 billion compared with £1,979 million in 2015. The reason it lost so much money is down to litigation and conduct costs — money set aside for legal issues and compensation — of £5.868 billion, as well as other key elements, such as restructuring costs totalling restructuring costs.
It is also struggling to see what it can do about spin-off Williams & Glyn
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RBS must sell W&G as a condition of returning excess capital and dividends to investors.
Last year, RBS warned that it would fail to meet the initial December 2017 sale deadline.
So the government put a "radical new plan" together
However, the EU is still assessing this plan and it could block it from happening.
Meanwhile, RBS last year set aside £3.1 billion for an impending fine from US authorities related to the mis-selling of
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