RBS to report £343m profit as debt burden lightens
A consensus of City analysts forecast that the lender, which is still 72% owned by the taxpayer, will report a £343 million profit for the three months to June 30, following on from a £259 million profit in the first quarter.
Graham Spooner, investment research analyst at The Share Centre, said investors are beginning to “see light at the end of what has been a very long tunnel”.
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Hide AdHowever, RBS is also predicted to detail £248 million in conduct and litigation costs and £228 million in restructuring charges.
When added to £577 million of restructuring costs booked in the first quarter, it would take the total for the six months to June to over £1 billion.
The group has racked up several billion in litigation and conduct costs since it was rescued by the Government at the height of the financial crisis.
Earlier this month, RBS agreed a £4.2 billion US settlement over claims it mis-sold toxic mortgage bonds in the run-up to the crisis, and it will take a £151 million charge in its second quarter as a result of the deal.
However, it is yet to reach a separate settlement with the Department of Justice (DoJ), which is expected later in the year, and the bank may need to set aside more cash to settle outstanding claims.