RBS reported a profit of 293 million pounds ($457 million)for the second quarter, up 27 percent on the year before, as economic recovery at home enabled it to recover loans that had been written off. Analysts had expected a loss of 260 million, according to forecasts provided by RBS.
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Mortgage applications rose to £9.4bn in the quarter.
His comments came as RBS posted a small increase in underlying operating profits for the first half of the year, up 2% at £3.45 billion.
The lender set aside £459m against litigation costs in the second quarter.
Philip Hampton, chairman of RBS, commented that there are still some obstacles to overcome, especially the resolution of outstanding conduct issues, including investigations into the sale of residential mortgage-backed securities in the US between 2005-07 and the investigation by UK authorities into the bank’s approach to distressed businesses.
The bank, which is about 79 percent owned by the British government after its 2008 bailout, also recorded 459 million pounds in additional legal charges, the bulk of which are related to mortgage-backed securities litigation in the United States.
Chancellor George Osborne has already said he wants to start selling shares in RBS by the end of the year and it is thought this plan could begin as soon as September.
Arguing it was important to be transparent and realistic, he said: ‘We do not expect to return to capital distribution until the first quarter of 2017 at the earliest.’.
“There were some analysts out there with expectations of capital distributions in 2016”. It would dearly like to get a sell-off going, even if that means taking an unnecessary loss on behalf of a taxpayer who would be better off if the Government gave Mr McEwan’s turnaround plan a bit more time to bear fruit. That included 734 million pounds related to the cutting of investment bank operations and 126 million pounds for the planned spinoff of Williams & Glyn, a branch network in Britain.
lSantander UK lifted half-year pre-tax profit by 70 per cent to £928million to cement its position as the Spanish bank’s most profitable market.
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Further to the completion of the offering RBS will no longer consolidate Citizens in its financial reports.
