RBS returns to profit in first half of year
BAILED-out banking giant RBS returned to profit in first half of this year with earnings of £9m.
Royal Bank of Scotland, which is 83% owned by the UK tax-payer, was helped by improving bad debt losses as it moved from a £248m loss in the first quarter to a £257m profit between April and June.
The group, which this week announced a deal to sell 318 branches to Spansih rival Santander, said impairment losses fell to £2.49bn from £2.68bn in the first quarter, reflecting the rebound in the global economy.
Chief executive Stephen Hester said the turnaround of the business is on track but added: “The rebuilding of RBS is a marathon not a sprint.”
RBS’s core retail and commercial banking business posted higher revenues during the quarter, but its investment banking division had a more difficult time, with revenues falling 31% from the first quarter.
Mr Hester added: “RBS second-quarter results show that the bank remains on track to meet the far-reaching goals of our five year restructuring plan which commenced last year.
“We are making good progress with disposals and overall business restructuring.
“Our customer base is solid and I believe that the future potential of RBS for all its constituencies becomes increasingly visible.”
The bank said that its overall lending was down by 3% on 2009 levels, but that the bulk of its loans were to small businesses.
Like its rivals such as Lloyds and Barclays, RBS said that it cannot lend faster than its customers want to repay their existing debts.
The asset sale to Santander was forced by the European Commission after the £45bn rescue of RBS by the Government.
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