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First-half profit as RBS recovery gathers pace

Friday, August 04, 2017 - 01:55

Royal Bank of Scotland beat first-half profit forecasts on Friday in a sign its long-promised recovery is finally gathering pace, and as Kate King reports it's looking to move up to around 150 jobs to Amsterdam after Brexit.

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Under reconstruction since the financial crisis, the Royal Bank of Scotland is now poised to make its first, first-half profit in three years. but it's CEO says a full year profit is still unlikely. SOUNDBITE (English) ROYAL BANK OF SCOTLAND CEO, ROSS MCEWAN, SAYING: "It has underlying businesses that are very very good, but we got embroiled before the financial crisis in so many activities and have paid the price of I think growth at all cost and unfortunately that has been worn over a ten year period." The state-controlled lender was rescued in a 45.5 billion pound bailout in 2008. Since then it's failed to make an annual profit. It's 939 million pounds in pretax profit in the six months to June, was higher than analysts had estimated. But the bank is still facing a host of outstanding legal challenges that could hinder the resumption of dividends. SOUNDBITE (English) RABOBANK, SENIOR CURRENCY STRATEGIST, JANE FOLEY, SAYING: "There is still this this concern about the legacy of fines and a lot of the scandals that they have been involved in. But I think if we look at the investment banks earnings in the second quarter for RBS we do see a better performance there. Again I think we can link this back perhaps to the better tone of of of world growth." Shares in RBS rose 5 percent on expectation that the recovery could be longer term, but they still remain well below what the government paid for them when it bought a 73 percent stake. And even when the bank returns to private hands, McEwan admits tax payers are aren't likely to reap the benefits. SOUNDBITE (English) ROYAL BANK OF SCOTLAND CEO, ROSS MCEWAN, SAYING: "If we sold it today we wouldn't get the money back, but what we are trying to do is create a good bank so they get as much of that money back as possible." While RBS is moving forward, it's also moving on. It's chosen Amsterdam to set up a post-Brexit office - to maintain its EU passporting rights.

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First-half profit as RBS recovery gathers pace

Friday, August 04, 2017 - 01:55