The Royal Bank of Scotland (RBS) reported better-than-expected figures for its first quarter on Friday while it awaits a multi-billion dollar fine from the U.S. Department of Justice (DOJ).
The Edinburgh-headquartered bank’s attributable profit for the first quarter stood at £792 million ($1.1 billion), compared with £259 million for the prior year period, and was better than the £534 million expected in a Reuters poll.
It also saw a 2.8 percent increase in income and a 2.1 percent reduction in costs, excluding litigation and conduct costs. RBS also saw its mobile banking app usage grow by 21 percent from the same period last year.
Chief Executive Ross McEwan called Friday’s earnings figures “a good set of results, showing the progress we are making, despite a more competitive market.”
“Our income is up, costs are down and our capital has strengthened again,” he said.
Here are the key highlights:
- First-quarter net profit stood at £792 million ($1.1 billion), compared with £259 million for the prior year period.
- The bank saw a 2.8 percent increase in income and a 2.1 percent reduction in costs, excluding litigation and conduct costs.
- Its mobile banking app usage grew by 21 percent on the same period last year.
But the positive news is overshadowed by its ongoing legal case and an impending multi-billion dollar fine from the U.S. Department of Justice (DOJ) over the bank’s selling of toxic mortgage-backed securities ahead of the 2008 financial crisis. The settlement, which is yet to be reached but expected sometime this year, has prevented the bank from providing dividends to its shareholders.
McEwan said Friday he has “given up commenting” on the timing of the settlement with the DOJ, according to Reuters.
RBS in March reached a separate settlement with the New York Attorney General in March for $500 million.
The bank in its fourth quarter of 2017 also set aside a reported £746 million for additional potential legal penalties over a personal protection insurance (PPI) mis-selling scandal, and the U.K.’s Financial Conduct Authority has set an August deadline for the PPI claims.
RBS has been more than 70 percent taxpayer-owned ever since its government bailout following the 2008 crisis. RBS came under fire earlier this year after announcing it would close 62 branches across Scotland, and was forced to partially renege on its plans and suspend 10 branch closures in response to public anger.
The bank, which is majority-owned by the U.K. government, saw its first profit in a decade last February. But uncertainty over the DOJ fine and the pending resolution of other legacy issues has prevented the government from being able to begin selling its stake.