The Royal Bank of Scotland, RBS, has returned a first half-year profit for 3 years.
RBS, which is 71% tax payer owned, has reported a profit of almost £1bn in the first six months of 2017, a big turnaround from the £2bn loss in the same period of 2016.
This is in line with reports that business confidence has risen significantly in the last six months according to the latest Business in Britain report. The survey, now in its 25th year, offers insights on the recent performance and expectations of domestic businesses. The survey is based on the responses of over 1,500 firms, especially small and medium-sized companies, drawn from all industries and all parts of the country.
The Business in Britain report shows that business confidence has risen since its four-year low following the EU referendum vote. Business confidence has risen significantly from 14% to 24% in the last six months.
The RBS, whose headquarters are in Edinburgh (above), realised a profit of £939m in the first half of 2017 in spite of litigation problems overseas where the US imposed a settlement figure of £3.65bn for selling mortgage products deemed risky in the US before the financial crisis.
Despite the positive profit news, the £3.65bn settlement figure has a negative impact on the likelihood of RBS returning to full year profit although it is hopeful to achieve this by the end of 2018.
Mr McEwan said he saw signs of strength in the UK economy in the retail sector but that “business customers were being more cautious about making investments.”
Last month, the European Commission accepted a government plan to free the bank from an obligation to sell off its (Future) Williams & Glyn division. RBS is looking to provide £833m of support to challenger banks. The European Commission originally insisted the sell-off as a condition of the £45.5bn bailout of RBS in 2008.
In preparation of Brexit, RBS has also announced that it is looking to move around 150 employees to European offices in Amsterdam.