RBS makes first profit in three years

Posted on August 7th, 2010 | Categories - Financial News

Royal Bank of Scotland has made a net profit of £9 billion marking its first profit since 2007. The taxpayer backed bank lost £1.04 billion in the same period last year.

The results signal that the firm is performing in line with its ambitious targets for the future, said Stephen Hester, Group Chief Executive.

He added: “RBS second quarter results show that the Bank remains on track to meet the far-reaching goals of our five year restructuring plan which commenced last year. We are making good progress with disposals and overall business restructuring. Our customer base is solid and I believe that the future potential of RBS for all its constituencies becomes increasingly visible”.

RBS was bailed out with £45 million of public money three years ago after the firm took over Dutch bank ABN Amro just before the credit crunch hit – the calamitous deal weakened its balance sheet leaving the company with no option but to accept government assistance. Since then the bank has been bootstrapping its way out of toxic debts in a bid to strengthen its financial base.

Mr Hester said: “The rebuilding of RBS is a marathon and not a sprint…our path to the sustainable profitability and other improvements we target will not be linear, given the scale of management action in our Core businesses, continuing risk reduction in Non-Core and the impact on both of a changeable economic and regulatory environment”.

Earlier this week RBS sold 311 branches to Spanish banking firm Santander.

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