Shares in Royal Bank of Scotland Group (LON:RBS) have lost ground in London this morning, even as the bailed-out lender posted a rise in profits for the first three months of the year. The lender, however, still expects a hefty fine from the US Department of Justice (DoJ) for mis-sold mortgage-backed securities in the run-up to the financial crisis.
As of 08:35 BST, RBS’ share price had given up 1.03 percent to 269.60p, underperforming the broader UK market, with the benchmark FTSE 100 index having climbed marginally into positive territory and currently standing 0.20 percent higher at 7,436.42 points. The group’s shares have added just under seven percent to their value over the past year, as compared with about a 2.7-percent rise in the Footsie.
RBS posts Q1 results
RBS announced in a statement this morning that its operating profit before tax had jumped 70.1 percent year-on-year to £1.21 billion, while its attributable profit had come in at £792 million, compared with £259 million in the prior-year period. The company, bailed out by the UK taxpayer at the height of the financial crisis, benefitted from a drop in restructuring costs. Income meanwhile rose by £90 million or 2.8 percent.
Going forward, RBS reaffirmed its 2018 guidance and medium-term outlook.
US DoJ fine still looms
RBS, however, provided no update on the looming DoJ fine, which is the last major obstacle to the government to start offloading its stake in the bank.
“I’ve given up choosing or commenting on when it will come,” chief executive Ross McEwan said, commenting on the DoJ fine, as quoted by The Telegraph, adding that “hopefully it will happen sooner rather than later”.
Last month, FTSE 100 peer Barclays (LON:BARC) agreed a £2-billion mortgage settlement with US authorities.