RBS reports first half profit

| August 6, 2010 | 0 Comments
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Royal Bank of Scotland (RBS), which is 83% owned by the taxpayer, today announced a profit for the six months ended June, boosted by falling charges for bad debt.

The bank posted a net profit of £9 million ($14.3 million) compared with a £1.04 billion net loss in the same period a year earlier.

Meanwhile, it added it was on target to meet its UK mortgage and business lending targets.

Today’s results are a significant improvement on the £24.1 billion loss it reported for 2008 – which represented the largest annual loss in UK corporate history.

The bank is in the midst of a five-year strategic plan to return the part-nationalised bank to normality and chief executive Stephen Hester said the restructuring plan was “on track”.

He said: “We are making good progress with disposals and overall business restructuring” but added “ the rebuilding of RBS was “a marathon not a sprint”.

Earlier this week, the bank confirmed it had sold the 318 Williams & Glyn’s network of branches to Spanish banking giant, Santander for £1.65 billion.

The majority of the branches are in the North West and will be turned into Santander banks, with the process expected to be completed by December 2011.

The Williams & Glyn’s network had to be sold under the orders of the European Commission as a punishment of the billions of pounds in state aid that RBS received by the Government.

In the meantime, today’s results from RBS have reinforced that the banking sector is in recovery mode and come just a day after Barclays reported a 44% rise in profits.

Also this week, Lloyds Banking Group reported it returned to profit in the first six months of 2010, revealing profits of £1.6 billion, against a loss of £4 billion a year earlier.

Furthermore, HSBC reported profits more than doubled, exceeding analysts expectations. HSBC, which is Europe’s largest bank, announced a pre-tax profit of $11.1 billion (£7 billion) for the six months to the end of June, compared with $5 billion in the same period a year ago.

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