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RBS triples profits but legacy conduct penalty on way

Written by: Victoria Hartley
RBS announced a first quarter profit of £792m compared with £259m for Q1 2017, however a mis-selling settlement could still wipe out profits.

Analysts at Jefferies, the investment bank, are forecasting a £2bn fine when the US Department of Justice investigation over mis-selling mortgages in the US is resolved and the payout confirmed.

The bank confirmed gross new mortgage lending in the quarter was £6bn with market share of around 10%, without Ulster Bank or private banking arms.

Ross McEwan, CEO, said: “In the first three months of 2018, we made a pre-tax profit of £1.2bn. This contributed to a bottom line profit in the period of £792m, exceeding the full year 2017 profit we reported back in February.

“This is a good set of results showing the progress we are making, despite a more competitive market. Income is up, costs are down and we’ve maintained capital strength.”

The digital piece

The bank said it has cut costs through “continued transformation and increased digitisation.”

It said that 5.75 million customers regularly use its mobile app, 21% more than Q1 last year and 55% of personal unsecured loans sales are via the digital channel, which is 39% more than Q1 2017.

Business banking digital current account openings accounted for 82% of total accounts opened, up from 59% in Q1 2017.

Branch counter transactions fell by around 7%, ATM transactions were down 17% and cheque usage also decreased 17%, said the bank.

It added: “Customers moving from our physical to digital channels continues to increase at pace.”

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