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Breakingviews: RBS impresses, but tough road lies ahead

Friday, May 02, 2014 - 03:06

May 2 - The state-owned bank’s shares soared 12% after Q1 profit trebled. But only a tenth of restructuring costs was used to support CEO McEwan’s new strategy. Breakingviews says RBS has a long way to go.

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RBS announcing a rare profit today he would talk about it is Dominic and it from breaking views. -- -- 12% women and what's behind this. And into the first line is worth pointing out that that's pretty unusual in the little six. Quarters before this and if you can see. On my screen behind -- that's the obvious share price for a and the last six courses each time that it reportage has dropped by an average of about 5% but can they always went down side you have to give obvious credit. Not repeating that sort of patent what's happened today is the -- and the first three months that. Learn and handles his once his pads as they have been previously brought him down 65 cents that was one thing. And then actually profit in the in the other divisions was pretty good to -- about enabled RBS to improve its. Balance sheet strengthening the key metrics in Iraq. The leverage ratio which is sort of just a measure of you'll a rule bank's equity -- its balance sheets and also -- the eyeballs -- three. Comic two tier one ratio which measures sort of risk weighted passes and -- not measure it it's up quite a lot of -- eight point 6% which was pretty much. The worst of any UK bank and almost any European Bank and now it's at nine point 4%. Which is pretty respectable site. You know we look forward to things like the stress tests. Actually obvious looks like it might be in an OK position it it probably will we'll still have some troubles but. It's an oval that's a position that -- for months -- so looking forward Dominique. What are investors want to know it can keep up this pace can we see continued profit plus it -- the the number one question remaining because -- The the problem with these results is yes it was a cool to wet very little happened that was too much to worry about -- for investors but. For the rest of the you have to think that. All BS's and target say that is going to save one billion in costs this year. I'm probably the same time have a loss of one and half billion from its bond bank where its restructuring everything. Not in the school -- In any booked about a tenth of those losses and expenses. So -- root for the rest of that -- -- Three courses the they're gonna have to jam nine tenths of those losses and expenses. He stressed the USA the shorts on -- is it should be tougher from here on the Bosnia. But today's story presumably and the -- presumably. Good news for the UK government that a base hates his reputation but I think everyone wanted to see that all of the ask its how the court to -- Things weren't bad election there was there was nothing to worry about -- when no one also no real nasty surprises announced on August 11 today said that. On its -- has to be good news. Great thank you very much Dominic and yet there. Talking about RBS this -- profits can whether or not it sustainable I'm nineteen along this is righteous.

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Breakingviews: RBS impresses, but tough road lies ahead

Friday, May 02, 2014 - 03:06