RBS makes Q1 operating profit

7th May 2010 07:05

Part-nationalised lender Royal Bank of Scotland moved into profit at the operating level during the first quarter of 2010 as impairment charges fell, although there was still a small pre-tax loss.Operating profit for the three months to 31 March was £713m compared with a £1.35bn loss a year ago, but the bank lost £21m before tax and after a £500m charge related to the Asset Protection Scheme. It had reported a £44m pre-tax loss a year earlier and made a profit of £134m during the final months of 2009.Profit before impairment losses came in at £3.39bn, up from £3.04bn in the first quarter of 2009 and nearly double the £1.75bn seen in the previous quarter. Impairment charges were £2.68bn, less than last year's £2.86bn and the fourth quarter's £3.10bn."We have made good progress but there is still significant work to be done," said chief executive Stephen Hester. "The year has begun for RBS broadly as we had expected.""Global recovery is helping impairments fall a little faster than we expected, though lumpy events may well interrupt that trend." The UK retail business grew operating profit to £140m from £17m a year earlier, but the Global Banking & Markets made just £1.47bn, down from £3.47bn last time when the division enjoyed "unusual conditions".More than £2bn in annualised cost savings have been achieved by the cost reduction programme so far, which is committed to deliver at least £2.5b of cost cuts by 2011.