Royal Bank of Scotland Group Plc (RBS,RBS.L) Friday reported a profit for its first quarter, compared to a loss last year, reflecting mainly higher income from trading activities and a one-off gain on its own credit adjustments. Looking ahead, the British lender expects further 'meaningful' cost reductions in 2014 and 2015. Shares are currently down 6 percent on NYSE and LSE.
The bank, which is 81 percent owned by the British taxpayers through a multibillion-dollar bailout during the financial crisis, is reportedly ready to privatize in a year and the government is preparing to sell part of the taxpayer's stake from the middle of 2014.
In an interim management statement, RBS said its operating profit before tax for the first quarter was 826 million pounds, compared to a loss of 1.51 billion pounds in the previous year.
The firm benefited from a 249 million one-off gain on its own credit adjustments, compared to a loss of 2.46 billion pounds last year. Impairment losses also fell to 1.03 billion pounds from 1.31 billion pounds a year earlier.
Profit attributable to ordinary and B shareholders totaled 393 million pounds, in comparison with a loss of 1.55 billion pounds last year. Earnings per ordinary and B share were 3.5 pence, compared with a loss of 14.2 pence per share a year ago.
Earnings per ordinary and B share from continuing operations were 2.6 pence, against a loss of 15 pence per share in the year-ago quarter.
Net interest income declined to 2.67 billion pounds from 2.92 billion pounds a year earlier. Non-interest income increased to 2.78 billion pounds from 1.30 billion pounds in the preceding year.
Income from trading activities climbed to 1.12 billion pounds from 212 million pounds in the prior year. Total income was 5.45 billion pounds, higher than 4.21 billion pounds reported in 2012. Looking ahead, RBS expects to deliver Group operating costs, excluding Direct Line Group, below market consensus view of about 13.2 billion pounds this year, with further meaningful cost reductions in 2014 and 2015.
The Group's Core Tier 1 ratio strengthened by 50 basis points to 10.8 percent. On a fully loaded Basel III basis, Core Tier 1 ratio improved 50 basis points to 8.2 percent.
RBS expects continued good progress, including a fully loaded Basel III Core Tier 1 ratio of around 9 percent by the end of 2013. The company said it sees the start of a pick-up in loan demand.
Stephen Hester, Group chief executive stated, "These results show pleasing progress in delivering a strong and valuable RBS for all our stakeholders. We expect to substantially complete the Bank's restructuring phase during 2014."
In London, RBS shares are currently trading at 290.29 pence, down 5.54 percent, on a volume of 19.39 million shares.
RBS ended on Thursday at $9.57 on the NYSE. In the pre-market, the shares are down 5.85 percent.
For comments and feedback contact: editorial@rttnews.com
Business News
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.