RBS reports strong earnings and first annual profit since 2007

Royal Bank of Scotland beat analyst forecasts by posting £871m in operating profit for the third quarter of its financial year, helped by cost-cutting measures and not having to pay any additional conduct charges.

The bank, which is still state-owned after having been bailed out for £45.5bn during the 2008 financial crisis, has now recorded a profit for each quarter of 2017, putting it on track to record its first annual profit since 2007.

On Friday it said that its common equity Tier 1 ratio, an important measure of a bank’s financial resilience, had also risen by more than expected during the three month period – to 15.5 per cent. At the end of June, the ratio had stood at 14.8 per cent, up from 13.4 per cent in December last year.

“Our core bank continues to generate strong profits and we remain on track to hit our financial targets,” chief executive Ross McEwan said.

Separately on Friday, RBS also said that it had agreed to pay $35m and enter into a non-prosecution agreement with the US Department of Justice to settle a probe of traders accused of defrauding customers on bond prices.

On Friday RBS said that the settlement had been announced on Thursday by an Attorney for the District of Connecticut.

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