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In a very positive quarterly result, the RBS surprises with a cancellation: to compensate for a chaotic Brexit, writes the bank already collapsed to nearly 130 million francs.
Benjamin Triebe, London
The Royal Bank of Scotland (RBS) is preparing for an unfavorable Brexit and is posting a further depreciation of £ 100 million (CHF 128 million). Investors were surprised: the stock price of the British financial institution fell from just under 6% to the London Stock Exchange at the beginning of the session and did not only slightly resumed. The rival banking group Lloyds, which is also heavily focused on the UK domestic market, has expressed confidence in the talk about the consequences of the UK's exit from the EU and no greater credit losses or deterioration in the payment behavior of their customers.
Attention to the place of abstention
RBS chief executive, Ross McEwan, also commented on Friday's announcement of quarterly figures, according to which the proportion of bad debts in the RBS portfolio is very low. The amended accounting rules would have made it necessary to calculate the possible damages caused by a difficult and unregulated Brexit. This scenario, in which no agreement is reached on future bilateral trade relations, has become more likely.
The impairment had a negative impact on the company's performance from July to September: RBS earnings and pre-tax earnings were better than expected. Compared to the same period of the previous year, revenues increased by 15% to £ 3.6 billion (£ 4.7 billion); Profit before tax increased by 10% to the equivalent of 1.2 billion francs, while net profit of 575 million francs fell, but increased by 14%. However, compared to the second quarter, the increase in turnover has lost momentum – a trend to reflect because of the uncertainty surrounding Brexit, which has increased since the summer. Analysts also noted a decline in net interest margin from 2.01% from April to June to 1.93% from July to September.
Very strong capital base
On the other hand, capital resources developed well: the capital base ratio rose to 16.7% at the end of September; eight basis points more than the same period last year. The RBS, which was saved by the British state during the financial crisis and still holds 62% of the capital, has set a quota of at least 13%. In August, he made the first payment since the bankruptcy with an interim dividend and is aiming for a dividend for the entire year. The details of the future distribution policy have not been mentioned by the bank. RBS is also working to further reduce the government's share through a share buyback.
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