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Royal Bank of Scotland sees more losses in third quarter | Royal Bank of Scotland sees more losses in third quarter |
(35 minutes later) | |
Royal Bank of Scotland has reported a £469m loss for the July-to-September period as "legacy issues" continue to overshadow its performance. | Royal Bank of Scotland has reported a £469m loss for the July-to-September period as "legacy issues" continue to overshadow its performance. |
The bank received a £45.5bn bailout during the financial crisis and has been tackling a range of problems. | The bank received a £45.5bn bailout during the financial crisis and has been tackling a range of problems. |
But once restructuring costs and provision for litigation were excluded, the bank made an adjusted quarterly operating profit of £1.3bn. | But once restructuring costs and provision for litigation were excluded, the bank made an adjusted quarterly operating profit of £1.3bn. |
It said it could not sell its Williams & Glyn bank by the end of 2017. | |
RBS has been ordered by the European Commission to sell Williams & Glyn in order to prevent the group from having too dominant a position as the UK's largest lender to small businesses. | |
Earlier this week, Clydesdale Bank confirmed that it had made an offer for Williams & Glyn after Santander abandoned plans to buy the business. | Earlier this week, Clydesdale Bank confirmed that it had made an offer for Williams & Glyn after Santander abandoned plans to buy the business. |
RBS declined to comment on Clydesdale's statement, saying only that it was "talking to a number of interested parties". | RBS declined to comment on Clydesdale's statement, saying only that it was "talking to a number of interested parties". |
However, RBS said it did not expect to expect to sell off the business by 31 December 2017, as had been required by the Commission. | |
Litigation costs | |
RBS's attributable or "bottom-line" loss had been widened by restructuring costs of £469m and conduct and litigation costs of £425m, as well as a deferred tax write-off of £300m. | |
The third-quarter loss compares badly with the same period last year, when RBS posted a profit of £940m. But that was flattered by proceeds from the sale of US bank Citizens. | |
Unlike Lloyds and Barclays earlier this week, RBS has made no new provision for costs arising from mis-selling of Payment Protection Insurance (PPI). | |
The new litigation costs have been set aside in readiness for expected liabilities in the US, where the bank faces charges in relation to the sale of mortgage-backed securities in the run-up to the financial crisis. | |
'Noisy' results | |
RBS said these were among "a range of uncertainties in the external environment". | |
RBS chief executive Ross McEwan said: "We've said that 2015 and 2016 would be noisy as we work through legacy issues and transform this bank for customers. These results reflect that noise. | |
"Our core business results were good, with a £1.3bn adjusted operating profit, our best quarter since 2014. | |
"The core business has now delivered on average over £1bn in adjusted operating profit for the last seven quarters." | |
RBS said it had achieved cost reductions of £695m in the first nine months of the year and was on target to meet its target of an £800m reduction by the end of this year. |