Sat, May 04, 2013 - Page 15 News List

Royal Bank of Scotland returns to profit in Q1

BACK IN BLACK:The bank received the world’s biggest banking bailout after the British government bought an 81 percent stake during the global financial crisis

AFP and AP, LONDON and PARIS

Royal Bank of Scotland returned to profit in the first quarter with net earnings of £393 million (US$610 million) after a hefty loss a year earlier, the state-rescued lender said yesterday.

RBS said its profit after tax for the January-March period compared with a net loss of £1.545 billion in the first quarter of last year — when the value of the bank’s outstanding debt had significantly increased.

“These results show pleasing progress in delivering a strong and valuable RBS for all our stakeholders,” the bank’s chief executive officer Stephen Hester said in a statement.

“We expect to substantially complete the bank’s restructuring phase during 2014,” Hester said. “We are seeing the start of a pick-up in loan demand and have a strong surplus of funds ready and available to fully support economic recovery.”

“Across the group we are working hard to improve what we do for customers and to better position the Bank for future growth,” he added.

The British government owns 81 percent of RBS after the Edinburgh-based bank was bailed out in the wake of the 2008 global financial crisis with £45.5 billion of taxpayers’ cash, making it the world’s biggest banking bailout.

Separately, BNP Paribas says its earnings slumped in the first quarter amid a steep drop in corporate and investment banking as Europe’s economic stagnation continued to bite.

France’s largest bank by assets says it made net profit of 1.58 billion euros (US$2.1 billion) in the January-March quarter, down 45 percent from 2.87 billion euros a year earlier.

In a statement yesterday, the bank said overall sales were lifted thanks to its asset management division, which benefited from rising global financial markets.

However, corporate and investment banking saw earnings tumble about 30 percent to 806 million euros on a 21 percent drop in revenue which the bank blamed on a “lackluster environment” and “occasional renewed tensions” in Europe.

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