RBS jumps on H1 profit surprise, although caution remains

25th Jul 2014 08:30

Royal Bank of Scotland (RBS) on Friday delivered a much better-than-expected first half operating performance, but said no one at the 80% taxpayer-owned bank was "complacent about the challenges ahead". The results, which came a week earlier than scheduled, showed operating profit totalled £2.6bn, or £3.3bn excluding restructuring and litigation and conduct costs, compared with £1.59bn in the same period a year earlier. The gains were driven by more favourable credit conditions and good results from RBS Capital Resolution, and came despite a 6% decline in total income to £9.9bn. Total expenses were 8% lower at £7.1bn, including £514m of restructuring costs and £250m of litigation and conduct costs. Chief Executive Ross McEwan said: "These results show that underneath all the noise and huge restructuring of recent years, RBS is a fundamentally stronger bank that can deliver good results for customers and shareholders." However, he added: "But let me sound a note of caution. We are actively managing down a slate of significant legacy issues. This includes significant conduct and litigation issues that will likely hit our profits going forward. "I am pleased we have had two good quarters, but no one should get ahead of themselves here - there are bumps in the road ahead of us."Shares jumped 13.97% to 374.72p by 08:37.NR