Royal Bank of
Shares in the 81% taxpayer owned bank jumped 12% after it was forced to issue its figures a week early as a result of improvement in profit to £2.6bn in the six months to the end of June.
A year ago, when
"We are actively managing down a slate of significant legacy issues. This includes significant conduct and litigation issues that will likely hit out profits going forward.
"I am pleased we have had two good quarters but no one should get ahead of themselves here – there are bumps in the road ahead of us."
The bank's share price is still well below the 500p average at which the taxpayer pumped in £45bn to prevent the
"These results show that the steady progress we are making as we take the steps to a much simpler, smaller and fairer bank," said McEwan.
The improvement in profits was driven by a £1.8bn fall in losses on bad debts to £269m as the income it generated actually fell 6% to £10bn. The bad debts improved in all divisions, particularly in the
The better than expected figures were also due to the run down of non-core assets – put in a new mini bad bank last year – which are on course to fall from £29bn to £15bn. The run down of these assets was expected to cost as much as £4.5bn between 2014 and 2016 but the bank now things it will cost between £2.5bn and £3bn as a result of "the more favourable economic environment".
Ulster bank – which is subject to speculation that a RBS could link up with a private equity partner – reported a first half profit of £55m as bad debts fell to £57m from £503m.
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