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Q1 Results 2017

RBS released Q1 results for 2017 on 28th April

Call with Management
Call with Management

Key Messages

  • This is our best start in recent years. These results show our path to profitability, as we continue to put the past behind us. We made a bottom line profit of £259m, our first since Q3 2015. The core bank has averaged over £1bn in adjusted core operating profit across the past nine quarters.
  • Our strategy is working and we are on track to deliver our financial targets. Costs are down, income is up, capital is robust and we’re growing in the markets we like.
  • We are going further on cost reduction, faster on digital transformation and are improving for our customers. We are on track to take a further £750m of costs out of the business this year and digital innovation is giving customers more control in how they bank with us. Our NatWest Personal NPS is the highest it has ever been and Commercial Banking is a market leader.
  • We continue to grow our lending to the UK economy. With a £3.7bn increase in net lending from Q4 and we are continuing to grow our mortgage book, winning 13% of new business, compared to our 9% stock share.
  • We still anticipate a bottom line profit in 2018 if we resolve W&G and the remaining RMBS litigation this year. A major milestone for this bank as we continue to become simpler, safer, and even more customer-focused.

Highlights

RBS reported an operating profit before tax of £713 million for Q1 2017 and an attributable profit(1) of £259 million.

Across our Personal & Business Banking (PBB), Commercial & Private Banking (CPB) and NatWest Markets (NWM) businesses, RBS reported an adjusted operating profit(2) of £1,326 million, an increase of £303 million, or 30%, compared with Q1 2016. Adjusted return on equity across PBB, CPB and NatWest Markets was 13.8% compared with 10.9% in Q1 2016.

Common Equity Tier 1 ratio increased by 70 basis points in the quarter to 14.1%, and remains ahead of our 13.0% target.

  • RBS reported an attributable profit of £259 million for Q1 2017 compared with a loss of £968 million in Q1 2016 which included payment of the final Dividend Access Share (DAS) dividend of £1,193 million.
  • Q1 2017 operating profit of £713 million compared with £421 million in Q1 2016. An adjusted operating profit of £1,371 million was £931 million higher than Q1 2016.
  • Adjusted income of £3,239 million was £425 million, or 15.1%, higher than Q1 2016. NatWest Markets adjusted income of £508 million was £231 million, or 83.4%, higher than Q1 2016 reflecting consistent customer activity and an improved trading environment compared to a particularly difficult Q1 2016. Across PBB and CPB, income was £108 million, or 4.3%, higher supported by asset growth.
  • Net interest margin (NIM) of 2.24% for Q1 2017 was 9 basis points higher than Q1 2016, as the benefit associated with the reduction in low yielding assets more than offset asset margin pressure and mix impacts across the core businesses. NIM increased by 5 basis points compared with Q4 2016 principally driven by deposit re-pricing in UK PBB and Commercial Banking.
  • Excluding a £51 million VAT recovery, adjusted operating expenses have reduced by £278 million, or 12.9%, compared with Q1 2016. The adjusted cost:income ratio for Q1 2017 was 55.8% compared with 76.1% in Q1 2016. Across the core PBB, CPB and NatWest Markets businesses, adjusted cost:income ratio of 54.9% compared with 62.4% in Q1 2016.
  • Restructuring costs were £577 million in the quarter, an increase of £339 million compared with Q1 2016, and included a charge of £235 million relating to the reduction of our property portfolio.
  • Litigation and conduct costs of £54 million comprised a number of small charges.
  • A net impairment loss of £46 million, 6 basis points of gross customer loans, compared with a loss of £223 million in Q1 2016, with the reduction principally reflecting a £226 million shipping impairment in Q1 2016. REIL represented 2.9% of gross customer loans compared with 3.6% at 31 March 2016 and 3.1% at 31 December 2016.
  • PBB and CPB net loans and advances have increased by 5.6% on an annualised basis in Q1 2017 principally driven by mortgage growth within UK PBB.
  • Tangible net asset value (TNAV)(3) per share increased by 1p from Q4 2016 to 297p.
  • CET1 remains ahead of our 13% target at 14.1%, a 70 basis point increase on Q4 2016 driven by a £6.5 billion reduction in RWAs and the £259 million attributable profit.

Notes:

(1) Attributable to ordinary shareholders.

(2) Operating profit before tax excluding own credit adjustments, gain on redemption of own debt, strategic disposals, restructuring costs and litigation and conduct costs.

(3) Tangible equity is equity attributable to ordinary shareholders less intangible assets. The dilutive impact was 2p ( 31 December 2016 – 2p)

Results archive

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  • 2005
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  • 2003
  • 2002
Item Year Date Title Announcements Excel Slides Webcast Transcript
data-ip3- 2017 28 Apr Q1 Results 2017
data-ip3- 2017 28 Feb CFO Round Tables
data-ip3- 2017 26 Jan Provision for US RMBS investigations
data-ip3- 2016 28 Apr 2016 GSIB Indicators
data-ip3- 2016 24 Feb Annual Results 2016
data-ip3- 2016 02 Dec EBA 2016 EU-Wide Transparency Exercise
data-ip3- 2016 28 Oct Q3 Results 2016
data-ip3- 2016 05 Aug H1 Results 2016
data-ip3- 2016 29 Apr Q1 Results 2016
data-ip3- 2016 04 Feb Restatements
data-ip3- 2016 27 Jan Announcement
data-ip3- 2015 29 Apr 2015 GSII Indicators
data-ip3- 2015 26 Feb Annual Results 2015
data-ip3- 2015 30 Oct Q3 Results 2015
data-ip3- 2015 24 Nov EBA 2015 EU-Wide Transparency Exercise
data-ip3- 2015 30 Jul H1 Results 2015
data-ip3- 2015 30 Apr Q1 Results 2015
data-ip3- 2014 31 Dec GSII Indicators Disclosure
data-ip3- 2014 26 Feb Annual Results 2014
data-ip3- 2014 31 Oct Q3 Results 2014
data-ip3- 2014 01 Aug Interim Results 2014
data-ip3- 2014 25 Jul Q2 Preliminary Results Announcement
data-ip3- 2014 21 Jul Divisional reorganisation
data-ip3- 2014 02 May Q1 Results 2014
data-ip3- 2013 31 Jul G-SIB Indicators Disclosure
data-ip3- 2013 27 Feb Annual Results 2013
data-ip3- 2013 01 Nov Q3 Results 2013
data-ip3- 2013 02 Aug Interim Results 2013
data-ip3- 2013 03 May Q1 Interim Management Statement 2013
data-ip3- 2012 28 Feb Annual Results 2012
data-ip3- 2012 02 Nov Q3 Interim Management Statement
data-ip3- 2012 03 Aug Interim Results 2012
data-ip3- 2012 04 May Q1 Interim Management Statement 2012
data-ip3- 2012 01 May Divisional Restatements
data-ip3- 2011 23 Feb Annual Results 2011
data-ip3- 2011 04 Nov Q3 Interim Management Statement
data-ip3- 2011 05 Aug Interim Results 2011
data-ip3- 2011 06 May Q1 Interim Management Statement
data-ip3- 2010 24 Feb Annual Results 2010
data-ip3- 2010 05 Nov Q3 Interim Management Statement
data-ip3- 2010 06 Aug Q2 2010 Results
data-ip3- 2010 07 May Q1 Interim Management Statement
data-ip3- 2009 25 Feb 2009 Annual Results
data-ip3- 2009 06 Nov Interim Management Statement Q309
data-ip3- 2009 07 Aug 2009 Interim Results Presentation
data-ip3- 2009 08 May Interim Management Statement Q109
data-ip3- 2009 19 Jan Trading Update
data-ip3- 2008 26 Feb Annual results for the year ended 31 December 2008
data-ip3- 2008 26 Feb The Royal Bank of Scotland Group – Full Year Results 2008 – Appendix 1
data-ip3- 2008 26 Feb The Royal Bank of Scotland Group – Full Year Results 2008 – Appendix 2
data-ip3- 2008 04 Nov Placing and Open Offer Presentation
data-ip3- 2008 07 Aug 2008 Interim Results Presentation
data-ip3- 2008 11 Jun Pre-Close Trading Update June 2008
data-ip3- 2008 22 Apr Update on Credit Market Exposures, Disposals, Capital, Trading Conditions and Outlook
data-ip3- 2008 22 Apr Rights Issue Presentation
data-ip3- 2008 22 Apr Rights Issue US Investor Call
data-ip3- 2007 27 Feb Annual results for the year ended 31 December 2007
data-ip3- 2007 06 Dec Pre-close Trading Update
data-ip3- 2007 02 Aug 2007 Interim Results Presentation
data-ip3- 2007 05 Jun Trading Statement Call
data-ip3- 2006 28 Feb Annual results for the year ended 31 December 2006
data-ip3- 2006 06 Dec Pre-close Trading Update
data-ip3- 2006 03 Aug Interim Results for the half year ended June 30 2006
data-ip3- 2006 13 Jun Pre-Close Trading Update
data-ip3- 2005 27 Feb Annual results for the year ended 31 December 2005
data-ip3- 2005 08 Dec Pre-Close trading update
data-ip3- 2005 03 Aug Interim Results 2005 – 30 Jun 2005
data-ip3- 2005 08 Jun Trading Update and IFRS Transition Report
data-ip3- 2004 23 Feb Annual results for the year ended 31 December 2004
data-ip3- 2004 05 Dec Pre-close trading update
data-ip3- 2004 02 Aug Interim Results 2004 – 30 Jun 2004
data-ip3- 2004 09 Jun Pre-close trading update
data-ip3- 2003 18 Feb Annual Results 2003 – 31 Dec 2003
data-ip3- 2003 08 Dec Pre-close trading update
data-ip3- 2003 05 Aug Interim Results 2003 – 30 Jun 2003
data-ip3- 2003 11 Jun Pre-close trading update
data-ip3- 2002 27 Feb Annual results for the year ended 31 December 2002