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RBS returns to profitability and continues to grow market share

Paloma Kubiak
Written By:
Paloma Kubiak

RBS has returned to profitability for the first time in two years with mortgage lending a key driver in the bank’s improvement.

Gross new mortgage lending within the main UK personal banking business in Q1 of 2017 was £7.8bn – 10% higher than Q1 2016. A similar performance for the rest of the year would put it on course for more than £31bn of lending.

The bank estimated its market share of new mortgages was approximately 13% – up from the 12% share it reported at the end of 2016 financial year on almost £30bn of lending.

In its quarterly update, the bank said it was on track to meet its 3% lending growth target for the full year, supported by mortgages.

Strong and improving core

Overall, RBS reported a profit of £259m for the first three months of 2017.

RBS CEO Ross McEwan said the bank was pleased to post a bottom line profit for the period.

“First, a strong and improving core bank and second, fewer remaining legacy issues. Core income is up on last year, adjusted costs are down, and we’re making better use of capital. These drive a 13.8% adjusted return on equity, an improving productivity in the core bank, and are important steps on our path to profitability.

“Our six core businesses made an adjusted operating profit of £1.3bn in Q1. RBS has now averaged an adjusted core operating profit of over £1bn for the last nine quarters.

“This bank has a very strong core with great potential, and we believe that by going further on cost reduction and faster on digital transformation – we will deliver a simpler, safer and even more customer-focused bank, with a compelling investment case,” he added.