EU News Digest Latest News & Updates
Simon Dawson | Bloomberg via Getty Images
A logo sits above an automated teller machine (ATM) outside a Royal Bank of Scotland Group (RBS) bank branch in London, U.K.
RBS reported a large earnings beat on Friday morning with the U.K. lender highlighting that it had swung back to a first-half profit for the first time in three years.
“We’re encouraged by the results today, it’s our second best six-month result since the crisis and our best set of six-month results since the first half of 2014,” Ewen Stevenson, RBS chief financial officer, told CNBC on Friday.
The U.K.-based lender, which required a state bailout during the financial crash, has been unable to report an annual profit since 2007. It has waded through several legal scandals, job cuts and asset sales over the past decade.
Despite the earnings beat on Friday, RBS’ Stevenson told CNBC that the bank may be set to record its tenth consecutive year without an annual profit in 2017.
“We know that we have still got at least one large issue ahead of us … the Department of Justice. So, if we get that settled this year I think we do expect that may push us in to a bottom line loss,” he added.
Last month, RBS was ordered to pay $5.5 billion to U.S. regulators for mis-selling mortgage-backed bonds. The bank said it had agreed to settle the lawsuit with the U.S. Federal Housing Finance Agency (FHFA) after being accused of mis-selling $32 billion of mortgage-backed securities before the global financial crisis.
RBS must settle its long-running disputes over the sale of mortgages packed into bonds before the U.K. government can sell its shares in the bailed out-bank.
