Royal Bank of Scotland has reported its best quarterly result in more than a year with a pre-tax profit of £826m and said it expects the goverment to be able to start selling its stake it the lender by the middle of next year or even earlier.
The profit for the first three months of the year compares to a £1.5bn loss in the same period in 2012 and a £2.2bn loss in the final quarter of last year, largely as a result of a fall in impairments in losses from RBS's "bad bank".
Stephen Hester, chief executive of RBS, said the results showed work turning around the performance of the taxpayer-backed lender was "nearing completion".
“These results show pleasing progress in delivering a strong and valuable RBS for all our stakeholders. We expect to substantially complete the bank’s restructuring phase during 2014," said Mr Hester.
He said the bank was seeing the "start of a pick-up in loan demand" and RBS had a "strong surplus of funds ready and available to fully support economic recovery".
Sir Philip Hampton, the chairman, said in a video statement that he expected the government to start selling shares from the middle of 2014 - or maybe earlier "depending on the government".
Mr Hester said there had not been any recent discussion about the privatisation with the authorities, but added that any sale would be "terrific for the country".
Losses form impairments - or bad loans - fell by 26pc to £1bn from £1.5bn in the final three monhts on the last year. It has now seen a 79pc reduction in non-core assets since it began restructuring in the wake of the financial crisis.
Core lending to small and medium sized businesses rose 1pc from the fourth quarter to to £34bn. UK residential mortgage lending remained broadly stable at £110.2bn.The increase in profits came despite RBS's continued push to shrink its markets business.
Profits from the bank's trading increased by 79pc, however this was not enough to prevent a fall in earnings from the markets division falling from more than £800m in the first quarter of last year to less than £300m this year. Shares in RBS fell 3.9pc in the early trading to 295.3p - the biggest faller on the FTSE 100.
Market analysts pointed to worse-than-expected operating profit of £829m, down 30pc year on year and below market expectations.
Investec cut its rating on the stock to a sell from a hold. The broker said in a note "RBS has rallied hard, up 15pc in four weeks, trading a shade above our 300p target price. On a 12 month view we do not see further upside.2
telegraph.co.uk
The profit for the first three months of the year compares to a £1.5bn loss in the same period in 2012 and a £2.2bn loss in the final quarter of last year, largely as a result of a fall in impairments in losses from RBS's "bad bank".
Stephen Hester, chief executive of RBS, said the results showed work turning around the performance of the taxpayer-backed lender was "nearing completion".
“These results show pleasing progress in delivering a strong and valuable RBS for all our stakeholders. We expect to substantially complete the bank’s restructuring phase during 2014," said Mr Hester.
He said the bank was seeing the "start of a pick-up in loan demand" and RBS had a "strong surplus of funds ready and available to fully support economic recovery".
Sir Philip Hampton, the chairman, said in a video statement that he expected the government to start selling shares from the middle of 2014 - or maybe earlier "depending on the government".
Mr Hester said there had not been any recent discussion about the privatisation with the authorities, but added that any sale would be "terrific for the country".
Losses form impairments - or bad loans - fell by 26pc to £1bn from £1.5bn in the final three monhts on the last year. It has now seen a 79pc reduction in non-core assets since it began restructuring in the wake of the financial crisis.
Core lending to small and medium sized businesses rose 1pc from the fourth quarter to to £34bn. UK residential mortgage lending remained broadly stable at £110.2bn.The increase in profits came despite RBS's continued push to shrink its markets business.
Profits from the bank's trading increased by 79pc, however this was not enough to prevent a fall in earnings from the markets division falling from more than £800m in the first quarter of last year to less than £300m this year. Shares in RBS fell 3.9pc in the early trading to 295.3p - the biggest faller on the FTSE 100.
Market analysts pointed to worse-than-expected operating profit of £829m, down 30pc year on year and below market expectations.
Investec cut its rating on the stock to a sell from a hold. The broker said in a note "RBS has rallied hard, up 15pc in four weeks, trading a shade above our 300p target price. On a 12 month view we do not see further upside.2
telegraph.co.uk
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