Misconduct costs push RBS to £469m loss

RBS chief executive Ross McEwan

Royal Bank of Scotland reported an operating profit before tax of £255 million in the third quarter — but made an attributable loss of £469 million after restructuring costs, litigation and conduct costs were taken into account.

RBS also said it will miss the European Commission’s deadline of December 31, 2017, for completing the sale of its Williams & Glyn branch network — set as a condition for receiving a £45 billion government bailout during the financial crisis.

The third quarter for RBS included a £469 million restructuring cost, £425 million of litigation and conduct costs and a £300 million deferred tax asset impairment.

Ross McEwan, RBS CEO said: “Our core business results were good with a £1.3 billion adjusted operating profit and a 14% return on adjusted equity.

“This is our best quarter for the core bank since 2014.

“The core business has now delivered on average over £1 billion in adjusted operating profit for the last seven quarters.

“The bottom line loss reflects continued progress in restructuring the business and addressing some of our legacy issues.

“Our mortgage net lending is up £3.6 billion in Q3.

“We are consistently growing market share, with a 12% share of new business compared to a stock share of 8.7%.

“Across our core franchises, the strong lending performance in the first half of the year has stood us in good stead.

“We’re still comfortably on track to surpass our lending target for the year in Personal & Business Banking and Commercial with lending of 9%, above our 4% target.

“We’ve said previously that this is a noisy part of our strategic plan and it continues to be so.”

On Williams & Glyn, RBS said it has had “positive discussions with a number of interested parties concerning a transaction related to substantially all of the business.”

RBS said these discussions were ongoing and may or may not lead to a transaction.

“However, none of the proposals under discussion can deliver full separation and divestment by 31 December 2017,” said RBS.

“RBS is therefore in discussion with HM Treasury, and expects further engagement with the European Commission, to agree a solution with regards to its State Aid obligations.”