There were reasons to be fearful and cheerful in Royal Bank of Scotland' s (RBS) third-quarter results. The market erred on the negative, unsurprisingly, given the £134m operating loss. But an improved capital base means that the group was 16.2 per cent on a pro forma tier-one basis at the end of September. That is if you had taken out the remaining shares in Citizens, sold at the end of October.
Tangible net assets were up by 4p to 384p, lifted by profits and reserve gains. But an area of weakness came in its core UK personal and business banking. The drop in year-on-year income from £1.2bn to £1.17bn goes some way to explain the negative sentiment - even though the quarter-by-quarter movement is in the right direction. More worrying is the declining net interest margin in this business, which was 3.54 per cent for the third quarter, compared with 3.72 per cent for the comparable period last year, as higher-yielding credit cards and unsecured loans shrunk.