These half-year results were overshadowed by news that Royal Bank of Scotland (RBS) is getting a new chief executive - the retail arm’s head, Ross McEwan, takes the helm in October. That’s just as well as there’s little in these figures to get excited about.
The bank’s profit turnaround, for example, isn't nearly as dramatic as the reported figures suggest. Adjust for such items as PPI mis-selling provisions, or accounting-related charges for the improved value of its own credit and half-year operating profit rose just 5 per cent to £1.68bn.
Moreover, the UK retail arm grew operating profit just 4 per cent to £954m - despite a lower bad debt charge. The corporate business, meanwhile, saw operating profit tumble 25 per cent to £753m, and Ulster Bank suffered a £329m loss. Investment bank downsizing also meant profits at the markets business slumped two thirds to £371m.
RBS set aside another £185m for payment protection insurance claims (PPI), too - taking the total PPI charge to £2.4bn - while a further £435m was provided to cover "legal and regulatory investigations". Improving credit quality did, however, allow the impairment charge to fall 19 per cent year-on-year to £2.15bn.
Investec Securities expects full-year pre-tax profit of £1.87bn and EPS of 5.4p (from a 54.3p loss in 2012) and net tangible assets (NTA) of 447.8p a share.
ROYAL BANK OF SCOTLAND (RBS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 320.2p | MARKET VALUE: | £35.7bn | |
| TOUCH: | 320.1-320.5p | 12-MONTH HIGH: | 370p | LOW: 201p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 620p* | |||
| Half-year to 30 Jun | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|
| 2012 | -1.68 | -19.6 | nil |
| 2013 | 1.37 | 3.8 | nil |
| % change | - | - | - |
*Includes intangible assets of £14bn, or 126p a share | |||
