RBS reported stronger third quarter earnsing but said the outlook was more uncertain as Brexit early next year looms on the horizon
London (AFP) - Royal Bank of Scotland on Friday announced a 14-percent rise in quarterly net profit but warned of a “more uncertain outlook” as Britain’s struggles to strike a Brexit deal.
Profit after tax rose to £448 million ($574 million, 505 million euros) in the third quarter to September compared to the same period in 2017, RBS said as it continues to recover after a record government bailout a decade ago at the height of the financial crisis.
RBS announced also that bad loans had increased by £100 million, “reflecting the more uncertain economic outlook”.
Chief executive Ross McEwan warned earlier this month that a no-deal Brexit risks sending the British economy into recession in 2019.
In the face of Brexit uncertainty, RBS lending was becoming more cautious while companies were delaying investment decisions, McEwan said.
The bank has said that it is planning for the worst amid increasing worries that Britain will exit the European Union in March without a deal in place with Brussels.
RBS is meanwhile looking to set up a European subsidiary in Amsterdam to serve customers on the continent.
The lender remains majority-owned by the British government after it was saved with £45.5 billion of taxpayers’ cash at the height of the global financial crisis in 2008.
Britain in June resumed privatisation of the Royal Bank of Scotland and the Conservative government led by Prime Minister Theresa May is seeking to sell two-thirds of its stake for roughly £15 billion over a five-year period.
RBS was fined $4.9 billion by the US Justice Department over its role in the subprime housing crisis which sparked the 2008 meltdown.