RBS shares jump on news of an unexpected trebling in its profits in the first quarter - and with no new charges for past misconduct. Melanie Ralph asks whether the state-controlled bank is finally shaping up.
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The Royal Bank of Scotland is finally hitting the headlines for the RIGHT reasons. Profits at the state-controlled bank trebled in the first quarter, jumping to a healthy 1.2 billion from 400 million pounds the year before. This is only the sixth time RBS have reported a profit since its 45 billion pound government bailout six years ago. The question now is whether the good news can continue? Dominic Elliot of Reuters Breakingviews. (SOUNDBITE) (English) REUTERS BREAKINGVIEWS, DOMINIC ELLIOT, SAYING: ''For the rest of the year you have to think that RBS's own target says that it's going to save one billion in costs this year and probably at the same time have a loss of one and a half billion from its bad bank where its restructuring everything. The short answer is, it should be tougher from here on for the rest of the year.'' Despite the challenges that lie ahead for RBS the first quarter results may hint at the bank turning a corner. RBS isn't the only British bailed out bank that's seeing a change in its fortunes. Lloyds has also reported improved earnings and is planning to float its TSB arm in the next eight weeks. RBS, on the other hand, still has some way to go before they can consider floatation. BCG's Mike Ingram. (SOUNDBITE) (English) BGC PARTNERS, MARKET STRATEGIST, MIKE INGRAM, SAYING: ''For RBS, As they lay out the last quarter numbers, you know, they have years of restructuring ahead, and when I was recently asked when I thought we'd probably see a share sale of RBS from the government I said it was probably going to be three years and I think that's probably still a fair assessment.'' For RBS, outstanding charges for mis-selling financial products remains a dark cloud hanging over them - though there are no new charges in the latest results. But with UK economic outlook picking up, banks and businesses may experience an easier backdrop to work in.
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