The Royal Bank of Scotland has returned to profit, posting a group pre-tax profit of £826m for the first three months of this year, compared with a loss of £2.2bn in Q4 2012.
In its Q1 results, the State-owned bank said its group operating profit of £829m was up 50 per cent from the previous quarter, driven by a reduction in non-core losses.
On the back of the positive results, chief executive Stephen Hester said the bank expected to complete its restructuring during 2014 and that therefore it was close to be ready for a subsequent return to the private sector.
RBS recorded a core operating profit of £1.3bn in Q1, compared with £1.5bn in Q4 2012 and £1.6bn in Q1 2012.
The bank said that it continues to monitor its provision for payment protection insurance redress costs but no further charge was made in the first quarter of this year. Of the cumulative £2.2bn charge accrued so far, £1.5bn in redress had been paid by 31 March 2013, the bank added.
Following progress on the interest rate hedging products redress exercise, the group now expects administrative costs to be higher than anticipated at the time of the 2012 annual results and it increased the provision for this by a further £50m.
Stephen Hester, group chief executive, said: “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.
“We are seeing the start of a pick-up in loan demand and have a strong surplus of funds ready and available to fully support economic recovery. Across the group we are working hard to improve what we do for customers and to better position the bank for future growth.”
