RBS first-quarter profit soars to £792m

Royal Bank of Scotland on Friday reported attributable first-quarter profit of £792 million compared with £259 million for the same period of 2017, beating analysts’ expectations.

RBS reported an operating profit before tax of £1.2 billion, 70.1% higher than first-quarter 2017.

Operating costs decreased by £442 million, or 18%, compared with first-quarter 2017.

However, RBS said it had no news on concluding talks with the US Department of Justice (DOJ) on an expected multi-billion pound fine over toxic mortgage bonds the firm sold before the financial crisis.

RBS could have to pay up to $9 billion, according to analysts at Deutsche Bank.

Conclusion of the the DOJ talks are a prerequisite for RBS to resume paying dividends and for the UK government to start to sell its 71% stake in the bank.

Gary Greenwood, an analyst at Shore Capital, said: “The outlook (for RBS) continues to be overshadowed by the impending US RMBS settlement with the DOJ, for which the timescale is out of the group’s control.”

RBS CEO Ross McEwan said: “In the first three months of 2018, we made a pre-tax profit of £1.2 billion.

“This contributed to a bottom line profit in the period of £792 million, exceeding the full year 2017 profit we reported back in February.

“This is a good set of results showing the progress we are making, despite a more competitive market.

“Income is up, costs are down and we’ve maintained capital strength.”

RBS meanwhile touted its push into digital banking.

“5.75 million customers now regularly using our mobile app, 21% higher than Q1 2017 and 5% higher than Q4 2017,” said RBS.

“55% of personal unsecured loans sales are via the digital channel, 39% higher than Q1 2017.

“Business Banking digital current account openings accounted for 82% of total accounts opened, up from 59% in Q1 2017.

“Compared with Q1 2017, branch counter transactions were down around 7%, ATM transactions were down 17% and cheque usage was down 17%.”