Royal Bank of Scotland (RBS) returns to profit in first quarter for the first time in 18 months

Caitlin Morrison
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RBS made a turnaround during the first quarter (Source: Getty)

Royal Bank of Scotland (RBS) swung back to a profit during the three months to the end of March this year.

The figures

RBS reported attributable profit of £259m, compared with a loss of £968m in the same period of last year.

Operating profit rose to £713m from £421m, while adjusted operating profit was up to £1.4bn from £440m.

The bank posted earnings per share of 2.2p, up from a loss of 8.3p per share in the first quarter of 2016.

Shares in the bank were up 3.4 per cent at the open.

Why it's interesting

RBS has been hitting headlines for the wrong reasons lately, so this return to profit after 18 months of losses will come as a relief to some investors - especially given that expectations were for a rather more modest £50m to £70m.

It will also be good news for the government, after chancellor Philip Hammond's admission last week that the Treasury could sell off its huge stake in the bank at a loss.

The group is facing a bill of £125m for legal battle with more than 27,000 retail investors, including 4,000 current staff, over a £12bn rights issue ahead of the government rescue in 2008. The lender has been trying to agree settlements with claimants in a bid to avoid a courtroom clash.

RBS revealed yesterday that it had reached a deal with another group of shareholders, meaning 87 per cent of the claims being brought have been settled.

Read more: We’d all be better off if the government sold its stake in RBS at a loss

What RBS said

The bank said it was maintaining its guidance for 2017. "In addition, and subject to providing fully for remaining significant legacy issues in 2017, our expectation remains that we will be profitable in 2018," the group added.

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