A shares surge added £2.5bn to the value of state-backed Royal Bank of Scotland after it said quarterly profits had doubled. RBS, 80% owned by the taxpayer, said profits before tax had risen to £1.64bn from £826m in the same period last year.
Meanwhile chief executive Ross McEwan indicated he would get roun
d a Government veto on giving bankers bonuses of twice their salaries by making changes to ensure he could pay enough to hold on to top staff.
Shares in RBS rose by as much as 13% after it published figures for the first quarter of the year, later settling back to about 9% – despite a warning from McEwan that there were still “plenty of issues from the past to reckon with”.
The trading update was the first since the group announced that it had tumbled to an £8.2bn loss for 2013 and launched a mammoth overhaul to slash costs by £5bn within three years.
This time, there were no new hits to cover past scandals or litigation, or major provisions such as the £4.8bn write-off it recently took to create a “bad bank” where it could hive off toxic assets.
RBS said it had seen a modest revival in lending volumes during the quarter, with improvements in UK retail and business banking while income from its markets business was lower as it shrunk its balance sheet. Costs also fell.
McEwan said the latest figures showed the “great job” it could achieve while in a “steady state”.
“But we still have a lot of work to do and plenty of issues from the past to reckon with,” he added.