RBS says profit down after US settlement, picture improving

By Associated Press

The Royal Bank of Scotland announced a steep fall in second-quarter profit Friday after being hit by a big charge from U.S. authorities over past misdeeds. But the bank said it is putting its troubled past behind it and will pay its first dividend to shareholders in a decade.

RBS, which remains 62 percent owned by U.K. taxpayers after a 2008 bailout, said Friday that net income was 96 million pounds ($125 million) for the first half of 2018, down from 680 million pounds ($883 million) in 2017. First-half net profit was 888 million pounds, down from 939 million pounds in 2017.

Earlier this year, the bank agreed to pay $4.9 billion to settle U.S. claims that it misled investors who bought securities backed by risky mortgages before the 2008 financial crisis.

The U.S. settlement drove RBS’ charges for litigation and conduct issues to 782 million pounds in the second quarter, up from 342 million pounds a year earlier.

CEO Ross McEwan said he was “confident the large legacy issues are behind us.”

“This bank is getting there, but we should not sit back on our laurels,” he said.

RBS said it planned to pay a dividend of 2 pence per share, subject to finalizing its settlement with the U.S. Department of Justice.

The bank’s shares rose more than 3 percent to 2.58 pounds in early trading on the London Stock Exchange.

This article provided by NewsEdge.