Shares in Royal Bank of Scotland Group (LON:RBS) have jumped more than three percent in London this morning, as the lender revealed that it had returned to profit in the first quarter of the year. The upbeat results came hot on the heels of news that the bank had settled with another group of shareholders suing the bailed-out company over its disastrous rights issue in 2008.
As of 08:20 BST, RBS’ share price had added 3.65 percent to stand at 262.65p, outperforming the broader UK market, with the benchmark FTSE 100 index having slipped marginally into the red and currently standing 0.11 percent lower at 7,229.40 points. The group’s shares have gained more than seven percent over the past year, and are up by some 16 percent in the year-to-date.
RBS announced in a statement this morning that made an attributable profit of £259 million in the first three months of the year, compared with a loss of £968 million in the prior-year period. The group’s operating profit meanwhile climbed to £713 million from £421 million.
“These results reflect very much what we talked about at full year,” RBS’ chief executive Ross McEwan said, as quoted by The Telegraph. He has been trying to turn around the company’s fortunes, with the lender continuing to struggle with its turbulent past.
BBC business editor Simon Jack, however, cautioned that, despite the progress being made, investors should not expect the bank to post a profit for the year.
“Big fines are still not settled with US authorities, but are expected to do so later this year and are likely to wipe out most if not all the money it makes in 2017,” he said, as quoted by the BBC.
The lender, however, has moved closer to resolving a legal dispute with shareholders suing the group over its disastrous rights issue in 2008. The Times reported this morning that RBS had reached an agreement with nearly 90 percent of the original claims by value after it sweetened its compensation offer a few weeks ago. The FTSE 100 company noted in today’s statement that should it fail to reach an out-of-court settlement with the remainder of claimants, the trial is scheduled to start on May 22.