The Royal Bank of Scotland Group third quarter showed an operating loss of £1,525 million, down from £3,533 million in the second quarter. This gave a core business operating profit of £1,193 million and the company said the operating performance benefited from stable NIM, good expense control and lower provisions. It believes good progress is being made in its five-year strategy.
Commenting, Stephen Hester said: "The release of our third quarter results today provides a timely reminder of why we are confident that we can restore RBS to standalone strength whilst serving customers well. Along the way we must also restore strong profitability and sustain a successful commercial spirit at RBS, without which value for all shareholders and a profitable exit for the UK taxpayer is not possible.
“This week marked a crucial milestone in RBS's recovery with announcement of the terms of the UK Asset Protection Scheme ("APS") participation and agreement in principle with the European Commission on state aid compensatory measures. While not all we wanted, we now have the tools to do our job. We greatly appreciate the steadfast support we have been given by the UK Government and taxpayers. We are completely concentrated on repaying that confidence and support by doing the job outlined for us above. The faster the pressures on us become similar to those on our competitors, the more likely we are to succeed - a goal which rather clearly aligns staff, customers, shareholders and UK taxpayers.
“Today our results show strong and even growing customer franchises and the majority of our businesses operating without surprises in the face of enormous pressures and change. They show progress in risk reduction and improved liquidity and funding strength. They show progress in efficiency. They show the decline in net interest margin arrested. Behind these results lie intense activity throughout the Bank, tough decisions being made, investments in the future taking place and a determination to make good on the recovery targets we published in August as part of our five year plan.
“However, we owe it to everyone to be realistic and transparent. Economic recovery is likely to be slow and the pain of economic adjustment will take years to subside. Our business will reflect these issues. Profitability in our core businesses will recover fully only when our own actions are also complemented by more normal interest rates and bad debt experience. The excess credit exposures in our Non-Core Division will also take time to work down with losses along the way. We further have to adjust our business and manage the changes required by the EC and will publish revised plans in that regard in February. Finally, regulatory pressures on all banks will continue to increase the cost of doing business and require higher margins and more capital than previously.
“In general I am upbeat, though realistic. We have a tough job but we are making good progress. While not without risk of setback, economies and markets do seem to be recovering. In turn that should mean RBS can move forward from here with purpose and, in time, growing momentum."
