Profits at Royal Bank of Scotland more than trebled in the first three months of 2018, easily beating expectations as income rose and costs fell.
The bailed-out bank, which is still majority owned by UK taxpayers reported first-quarter profits of £792m, compared with £259m for the same period last year.
RBS made a bigger profit in the first three months than for the whole of 2017, when it posted its first annual profit in a decade at £752m.
However, the bank is braced for a multibillion-pound fine from US regulators, which will ultimately weigh on the bank’s financial position. It is not clear when the US Department of Justice will conclude its investigation into RBS, involving the sale of financial products linked to risky mortgages.
“This is a good set of results showing the progress we are making, despite a more competitive market,” said Ross McEwan, the bank’s chief executive. “Income is up, costs are down and we’ve maintained capital strength.”
The bank’s operating costs between January and March were 18% or £442m lower than the same period in 2017.
RBS said the trend towards greater internet and mobile banking continued in the the first quarter. About 5.75 million customers regularly use the bank’s mobile app, up by a fifth compared with the first quarter last year.
At the same time, customer visits to branches continued to fall. Branch counter transactions were down by about 7%, while cheque usage fell by 17%.
The Federation of Small Businesses said RBS’s ongoing programme of branch closures would hurt small firms and vulnerable customers.
“With RBS’s finances improving, it’s disappointing to see the majority taxpayer-owned bank continuing to reduce in-person support for the public,” said Mike Cherry, the FSB national chairman.
“Local businesses rely on local bank branches, as do their customers. When a bank branch closes it makes accessing cash that much harder. Less cash flow in a local economy means less growth.”
The bank also announced on Friday that Patrick Flynn would join the board from 1 June as a non-executive director. Flynn was the chief financial officer of Dutch bank ING until May 2017.