Royal Bank of Scotland (RBS) reported its first annual profit for a decade, but there was little respite for shareholders as a fine for activities in the US looms large over the bank's prospects for 2018.
The company made a profit of £752m for 2017, far ahead of the £592m loss expected by analysts.
However the shares are down 4.15 per cent this morning (23 February) due to the implication of the bank setting aside £742m for fines and litigation for the year ahead.
Of that, £442m was set aside in anticipation of a bill from the US for the mis-selling of mortgage-backed securities, a bill analysts expect could run into billions of dollars.
RBS had previously said it expected to settle the issue in 2017.
RBS, majority owned by the taxpayer, has shrunk in size over the past decade.
Immediately prior to the financial crisis it had a balance sheet of £2.2trn, that has shrunk to the current level of £750bn.
While the direction of travel for the FTSE 100 listed company has been positive in recent years, it lost £6.9bn in 2016.
But Rob James, banks analyst at Old Mutual Global Investors, is among those who has had a long-term aversion to the shares.
He said RBS has a bigger share of the business banking market in the UK rather than the retail banking market where its peers derive more of their revenue.
He said the margins are lower in the business banking market, restricting the long-term potential of RBS relative to its peers.
Laith Khalaf, senior analyst at Hargreaves Lansdown, said RBS shares are unlikely to be an exciting investment until after the government has sold its stake in the banking giant.