RBS raises fear of further fines as losses double

Comments Off on RBS raises fear of further fines as losses double

Taxpayer-owned Royal Bank of Scotland’s pre-tax losses doubled in the first three months of the year and it warned that the outcome for the year could still be hit by large fines and delays in spinning off Williams & Glyn.

Chief executive Ross McEwan refused to say whether or not the bank would make a loss or profit for the full year.

“Profits will be distorted by restructuring charges and conduct issues this year,” said McEwan. “This is another year of heavy lifting. But we are now a much stronger and fairer bank for our customers with the core generating operating profits of £1 billion a quarter and growing in the markets we like.”

RBS made a loss of £968 million in the first-quarter — up from £459 million a year earlier. But that was after paying £1.2 billion to the Treasury to remove its special share which was one of the main bars to the bank paying dividends.

It still has three other hurdles to clear before that happens: passing the Bank of England’s stress test later this year, settling with US regulators over the mis-selling of mortgage-backed securities — which could lead to billions of dollars of fines — and disposing of Williams & Glyn under EU state aid rules.

“Larger corporates are holding back on investment for the next six to eight weeks.”

Ross McEwan

News that Williams & Glyn may not be sold or spun off by its end of 2017 deadline raises the possibility that a return to dividends may now not take place until 2018. It also raises the spectre of fines or even demands for the return of some or all of the £45 billion taxpayer bailout to the Treasury being ordered by the EU.

McEwan, said that RBS was now looking at alternative ways of getting Williams & Glyn out of the bank but would not elaborate. He said: “This is the most incredibly complex process that I have ever seen in banking. We have 700 different IT systems to deal with and we have to know that they are working and serving two million customers at Williams & Glyn on day one.”

RBS also revaled that it will leave its London headquarters building in 135 Bishopsgate by the end of this year. It will move up the road to the former ABN Amro building at 280 Bishopsgate. McEwan said that from being the City’s largest employer with 21,000 staff in 11 buildings it would be down to two main office blocks and some 14,000 people. 

McEwan said the Brexit vote was a significant factor adding to uncertainties for the bank. 

“Among our SME and retail clients we have not seen any change in behaviour,” he said. “But larger corporates are holding back on investment for the next six to eight weeks. We are well prepared for what may or may not happen.”

RBS shares — which cost the taxpayer 500p each — were down 5.3p at 239.5p.

Source Article from http://www.standard.co.uk/business/rbs-losses-widen-to-968-million-in-first-quarter-a3236486.html

April 29, 2016 |
Copyright © 2018 LondonBusinessLink.co.uk. All Rights Reserved. LondonBusinessLink.co.uk
WordPress Directory Theme

Classified Ads Software

We use cookies to ensure that we give you the best experience on our website.
More about our cookies
Ok
Skip to toolbar