Royal Bank of Scotland (RBS) has today (May 3rd) announced its first profit in 18 months, while also revealing its restructuring process will be completed in 2014.
The bank made a pre-tax profit of £826 million in the the first quarter of the year, which compares with a £1.5 billion loss during the same period of 2012. These figures are slightly higher than had been anticipated, as analysts had predicted profits of £800 million.
Chief executive Stephen Hester has instigated a comprehensive restructuring process, leading RBS to shed around £900 billion in assets, refocusing its lending on UK households and small businesses.
"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 support economic recovery," he stated.
When the process is complete, the government may then be able to begin selling shares in the lender, as it is currently 82 per cent owned by the taxpayer.
Following this news, traders reacted negatively, with RBS shares falling by 4.5 per cent in the first ten minutes of trading.
Learn about the sterling and forex trading at City Index
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.