Shares of Royal Bank of Scotland fell about 5% on Friday after it said its first-quarter attributable profit fell to £707 million compared with £808 million in Q1 2018.
Some analysts said that although the RBS profit beat expectations, the group’s underlying performance was poor.
“This is a low quality earnings beat and we think the market will punish RBS severely for it,” Goodbody analyst John Cronin told Reuters.
RBS CEO, Ross McEwan, who will soon leave the bank, said: “This is a solid set of results set against a highly uncertain and competitive backdrop.
“We continue to support our customers through this Brexit uncertainty while investing and innovating in digital services to meet rapidly changing customer needs.”
The results came a day after McEwan announced plans to leave RBS within a year.
RBS is still 62% owned by the UK state following its £45 billion taxpayer bailout at the height of the financial crisis.
RBS has launched a global search for a successor to McEwan, with top RBS executive Alison Rose tipped as the leading candidate.
The bank’s net interest margin — a key measure of underlying profitability — fell 6 basis points quarter-on-quarter to 1.89 percent.
It is unclear how and when the UK government will sell its remaining stake in RBS, although it is expected to sell the stake by 2024.
RBS chief financial officer Katie Murray told reporters this was a matter for the UK government and it was unclear if Brexit uncertainty would delay the process.
“They’ll take a view there, but at the moment the government is absorbed with Brexit so that may or may not have an impact,” she said.