Royal Bank of Scotland Group’s third quarter net profits have risen by more than £50m despite sustained organisational restructuring costs.
The rise in profits from the equivalent quarter last year comes in the midst of a restructuring operation, an expensive plan that has seen the company’s revenues fall as the bank becomes smaller.
RBS, currently 73 per cent owned by the state, is part way through a plan to cut back investment operations in order to shift its focus to retail and business customers in the UK.
As part of this plan, the bank has sold its remaining 110.5m shares in US lender bank Citizens Financial. This paired with lower costs than expected has seen profits rise and could help with the company’s share price.
Analysts had predicted the bank would need to set aside an additional £300m to cover PPI payouts. However, this money was not needed.
Recently appointed chairman Sir Howard Davies said the bank, that had to be bailed out by the UK government in 2008, is on its way to becoming a “normal, steadily profitable” bank.
Despite the bank’s promising third quarter profits, RBS still has legal issues over mortgage securities in the US, which could see the bank potentially being hit with a bill of several billion dollars.