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RBS reports £968m loss after government payment | |
(35 minutes later) | |
Royal Bank of Scotland has reported a £968m loss for the first three months of 2016 - more than double the loss in the same period last year. | |
RBS said a one-off dividend payment of £1.2bn to the UK government dragged down an otherwise profitable period. | |
Operating profits rose to £421m for the quarter, up from just £37m in 2015, but total revenue fell 13% to £3.06bn. | Operating profits rose to £421m for the quarter, up from just £37m in 2015, but total revenue fell 13% to £3.06bn. |
RBS is still 73% owned by taxpayers after its government bailout during the financial crisis. | |
The bank said that excluding the one-off payment to the government, which will allow RBS to resume paying dividends to private shareholders in due course, it would have posted a profit of £225m. | |
It said last month that dividend payments were not expected to resume for at least a year. The bank shares were trading down almost one percent on Friday morning at 243p per share. | |
Ross McEwan, chief executive, said: "This bank has great brands and great market positions and piece-by-piece we are building a solidly performing, profitable bank doing great things for customers and returning value for shareholders." | |
Spin-off stalls | |
On Thursday, RBS said that spinning off its subsidiary Williams & Glyn, as demanded by the EU, was taking longer than expected. | |
Continuing efforts to restructure the business - including the Williams & Glyn separation - cost the bank £238m. | |
"Unfortunately the 'to do' list at RBS continues to grow," said Richard Hunter, head of research at Wilson King Investment Management, with the delays and costs associated with divesting Williams & Glyn "the latest fly in the ointment". | |
But day-to-day expense control provided a bright spot for the bank, as it tried to cut operating expenses by £800m a year by the end of 2016. So far this year, they are £189m lower. | |
RBS said there had been strong growth in both its mortgage and commercial businesses in the quarter. | |
However, challenging market conditions that have affected traders across the banking sector were a drag on revenues. | |
There were also sales of assets, such as Coutts private bank subsidiaries in Asia, the Middle East and Russia, that brought in less than had been expected. |