LONDON (AP) — Part-nationalized Royal Bank of Scotland achieved some milestones in its recovery in the first quarter, its chief executive said Friday as the bank reported another big loss.
CEO Stephen Hester said RBS would finish repaying 75 billion pounds ($121 billion) of government-backed loans this month, and that it has made progress in shedding noncore businesses and reducing bad loan provisions.
For the three months to March 31, RBS reported a net loss of 1.52 billion pounds, nearly three times the 528 million pounds loss a year ago. Income was down 10 percent to 6.9 billion pounds.
Results were broadly in line with expectations.
Although RBS is paying off the government -backed loans, taxpayers still hold an 82 percent stake in the bank.
RBS shares rose 1.5 percent to 24.92 pence in morning trading, short of the 50 pence break-even price on taxpayers' 45.5 billion pounds bailout investment.
"There are a number of notably improving divisional performances, and balance sheet metrics are strong. We still dare to dream that RBS could reach 30 pence by Christmas," analysts at Investec Securities said in a research note.
A more detailed look at the figures shows that RBS reported an operating profit of 1.18 billion pounds, but that was wiped out by a 2.5 billion pounds accounting charge on the value of the company's debt. However, impairment losses of 1.3 billion pounds were down 33 percent compared to a year earlier.
RBS made an additional provision of 125 million pounds to compensate customers who bought payment protection insurance that they didn't need, raising the total charge to 1.2 billion pounds. Barclays and Lloyds Banking Group earlier raised their provisions for compensation.
RBS said it shed 11 billion pounds in noncore assets in the quarter, raising the total disposals to 175 billion pounds.
The bank's markets division reported an operating profit of 824 million pounds compared to a loss of 109 million pounds in the previous quarter. RBS plans to shrink its markets business by withdrawing from corporate broking, equity capital markets, and mergers and acquisitions advisory businesses.
"We are happy with progress in the first quarter though the economic and regulatory backdrop remains tough," Hester said. "RBS continues, markedly, to regain strength and resilience."
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