RBS reported an operating profit before tax of £961 million for Q3 2018, compared with £871 million in Q3 2017, and £2,787 million for the year to date.
Q3 2018 attributable profit of £448 million and £1,336 million for the year to date.
CEO Ross McEwan said:
“This is a good performance, set against a highly competitive market and an uncertain economic outlook. We are growing lending in our target markets and are in a strong position to support the economy. We’re aware there is much more work to do and are fully focused on improving for our customers.”
Income stable in a competitive market:
• Income increased by £268 million, or 2.7%, for the year to date compared with 2017. Excluding NatWest Markets and Central items and notable items in UK PBB and Commercial Banking, income was broadly stable.
• Q3 2018 income increased by £485 million, or 15.4%, compared with Q3 2017 principally reflecting indemnity insurance recoveries of £272 million and lower disposal losses.
• Q3 2018 net interest margin of 1.93% decreased by 8 basis points compared with Q2 2018. Excluding one-off items, net interest margin was down 5 basis points, of which 3 basis points related to competitive pressure and 2 basis points due to higher average liquidity balances.
Lower costs through continued transformation and increased digitisation:
• Compared with 2017, other expenses for the year to date decreased by £183 million, or 3.3%, excluding VAT releases in 2017, and FTEs reduced by 6.8%.
• We continue to transition from physical to digital services. 6.2 million customers now regularly use our mobile app, 14% higher than Q4 2017. In UK PBB, total digital sales increased by 22% for the year to date, representing 43% of all sales.
Strong capital position:
• CET1 ratio of 16.7% increased by 60 basis points in the quarter reflecting further RWA reductions and the attributable profit for Q3 2018.
• RWAs decreased by £4.3 billion in the quarter primarily reflecting reductions in NatWest Markets and the impact of capital initiatives in Commercial Banking.
• We have taken an additional £100 million impairment charge reflecting the more uncertain economic outlook and a further net £60 million impairment charge in our Irish business in relation to ongoing sales from our loan book to further reduce the level of non performing loans. Underlying credit conditions remained benign during the quarter.
• Following final settlement with the US Department of Justice, RBS declared a 2p interim dividend on 14 August 2018.
Conference call replays
Replays can be accessed two hours post event. Replay facilities will be available until Sunday 11 November 2018. To access a replay dial-in from the following telephone numbers and use the appropriate access code from the list below:
International dial: +44 (0) 333 300 9785
UK free call dial: 0808 238 0667
Wires Conference Audio conference ID: 3383145
Analyst Conference Audio conference ID: 3892346
Transcripts
Q3 Results 2018 Press Conference transcript [PDF 120KB]
