news desk
\nLONDON
\nRoyal Bank of Scotland on Friday announced a \u00a31.7 billion ($2.06 billion) dividend, but warned that a tough economic environment ahead of Brexit means it is likely to miss its profitability and cost targets for next year.
\nThe state-backed lender posted stronger than expected half-year pretax profits of \u00a32.7 billion, above forecasts of \u00a32.3 billion according to a company-provided average of analyst forecasts.
\nThe figure was up 48 percent on \u00a31.8 billion the previous year, largely lifted by a \u00a3700 million boost from selling its stake in Saudi bank Alawwal.
\nWithout this one-off boost, pretax profits came in at \u00a32 billion, just ahead of consensus forecasts for \u00a31.9 billion.
\nBut the bank said a tough outlook would make it \u201cvery unlikely\u201d to meet its target of achieving a 12 percent plus return on tangible equity. It said it would struggle to reduce its cost to income ratio to below 50 percent by 2020, although said this remained its medium term goal.
\nThe lender followed up on its first full-year dividend in a decade with an interim dividend of 2 pence per share and a special dividend of 12 pence.
\nThe UK government, which owns 62 percent of the lender following a financial crisis bailout, will receive a billion pounds of that.
\nRBS gave no update on its search for a new CEO. Outgoing head Ross McEwan (below), 62, said in April he planned to retire within the next year, but the hunt to replace him has gathered urgency after National Australia Bank said last month that he would become their next chief executive.
\nRBS business banking boss Alison Rose is widely seen as the leading internal candidate for the job. External contenders include HSBC UK chief Ian Stuart and Whitbread CEO Alison Brittain, according to press reports.
\nRBS said its overall lending business was healthy, but it reported an increase in bad loans of \u00a3182 million for the first half compared with the previous year.
\nRBS also said there was a modest increase in default rates among personal banking customers, a decline in property valuations in the retail sector and large companies delaying financing due to Brexit uncertainty.
\n\u201cThere are some small signs of strain but at this point nothing we\u2019re particularly concerned about,\u201d CFO Katie Murray said.
\nAnalyst Edward Firth, at broker KBW, said: \u201cThis is overall another set of disappointing of results from RBS, which is now facing an extremely demanding operating environment.\u201d <\/p>\n","protected":false},"excerpt":{"rendered":"
news desk LONDON Royal Bank of Scotland on Friday announced a \u00a31.7 billion ($2.06 billion) dividend, but warned that a tough economic environment ahead of Brexit means it is likely to miss its profitability and cost targets for next year. The state-backed lender posted stronger than expected half-year pretax profits of \u00a32.7 billion, above forecasts […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-77170","post","type-post","status-publish","format-standard","category-business"],"yoast_head":"\n