Private Bank Results Shine For RBS

Tom Burroughes

26 October 2018

The commercial and private banking arm of UK-listed Royal Bank of Scotland, which includes the Coutts and Adam & Co wealth management arms, logged a year-on-year gain to operating profit, standing at £84 million in the three months to 30 September, from £66 million a year earlier.

Total income rose to £195 million in Q3 from £166 million in the same period of 2017; net interest margin widened to 2.54 per cent from 2.39 per cent, RBS said.

Assets under management rose to £21.8 billion at 30 September from £21.5 billion at the end of last year. The AuM figure rose as a result of new business inflows and investment gains, RBS said.

“Our results today continue to show the notable progress we are achieving quarter on quarter driven by improved margins, strong volume growth and more efficient capital management. The work we have undertaken to transform Coutts over recent years is now clearly evident. The increase in return on equity to 16.3 per cent year to date and our 7 per cent rise in lending are both encouraging, as is the 18 per cent increase in our assets under management – these are all extremely strong and pleasing figures," Peter Flavel, Coutts chief executive, said.

RBS, which was bailed out by the UK taxpayer in the financial crisis of 10 years ago, is still partly owned by the government. The latest figures for the group as a whole will be broadly cheering for the government on the day that finance minister Philip Hammond delivers his annual budget statement to lawmakers. Profit attributable to ordinary shareholders rose to £448 million in Q3, from £392 million a year earlier.

RBS’ common equity Tier 1 ratio, a measure of a bank’s capital buffer in the event of market shocks, stood at 16.7 per cent at the end of September, up from 16.1 per cent at the end of June.

Banking peers Lloyds Banking Group and Barclays have already reported Q3 results this week.