RBS warns that Eurozone crisis will hit its earnings

THE second-quarter earnings of Royal Bank of Scotland’s global banking and markets business will reflect the weakness in fixed-income markets due to debt woes in the Eurozone, an executive has said, warning that bond markets will remain tough in the third quarter.

The comments come a few days before RBS, 83 per cent owned by the UK government, announces second-quarter earnings. Global banking and markets account for more than half of the bank’s core profit.

“It wouldn’t surprise you to note that the entire fixed-income markets are more challenged in the second quarter than they were in the first and we will be representing that trend,” John Hourican, chief executive of RBS’s global banking and markets business, said.

“We have a biased business toward macro, fixed-income. I would have to say for the third quarter the markets continue to be challenging.”