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RBS sees first annual profit since 2007

RBS sees first annual profit since 2007

Analysts await Royal Bank Scotland plc (The) (NASDAQ:RBS) to report earnings on Feb, 23 for the fiscal quarter ending Dec 2017.

Its Carillion hit adds to the charges taken across the sector after a raft of British banks were exposed to the outsourcer through unpaid loans, with Barclays revealing a £127 million hit in the fourth quarter, and Santander having booked £203 million in impairment losses which were primarily made up of loans to Carillion gone bad.

RBS's chief financial officer Ewen Stevenson said the bank's 2018 results would "in part depend on DoJ - we'll control what we can control".

"RBS, still majority-owned by the taxpayer, has recently been dragged through the coals by the disconcertingly hesitant Financial Conduct Authority (who initially tried to bury the report) for its terrible customer relations".

However an impending fine from the US Department of Justice is expected to impact the bank's 2018 profits. "But if you have a look at the underlying profitability of this bank, it is very good".

A number of research firms have recently weighed in on RBS.

That hasn't stopped the banks share price dropping in early trading as investors continue to take some profits on the best performing, in share prices terms, of the United Kingdom banks in the past 12 months, with the share price dropping to its lowest level this year.

One RBS-follower said: "Indeed, with the price now standing at around half of the government's breakeven point, the taxpayer is still going to come out of this nursing a significant loss".

RBS also pushed ahead with its cost-cutting drive and restructuring plan, having cut expenses by £810m past year, exceeding its £750m target.

McEwan, a New Zealander who has run RBS since 2013, later told reporters that he plans to stay at the bank until it has settled the USA case and resumed payouts, which would likely take the form of a small dividend initially.

"With eye-watering profits and bonuses being paid to RBS Senior Executives there is no excuse for branch closures".

Simon Warren tweeted: "Royal Bank of Scotland has returned to profit for the first time in a decade".

On a wider view of the group, gross new mortgage lending across UK PBB, Ulster Bank RoI, Private Banking and RBS International (RBSI) dropped from £35.8bn in 2016 to £33.9bn in 2017.

Alistair Darling, the chancellor in 2008, has told how RBS warned him it only had "two or three hours" before its cash machines ran out, which would have sparked economic and social "collapse".

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