RBS Profits Rocket 98% from Same Quarter Last Year

RBS Profits Rocket 98% from Same Quarter Last Year Reuters

The Royal Bank of Scotland has revealed a 98% leap in profits for the first quarter when compared to the same period last year.

According to the bank's latest set of results, pre-tax profit reached £1.64bn (€2bn, $2.8bn) in the first three months of 2014, up from £826m in 2013.

Operating profit for the quarter was £1.5bn, up from £747m last year.

"Just over two months ago, I set out our plan for making RBS the most trusted bank in the UK. Today's results show that in steady state, RBS will be a bank that does a great job for customers while delivering good returns for our shareholders," said Ross McEwan, CEO at RBS.

"But we still have a lot of work to do and plenty of issues from the past to reckon with. Everyone at RBS is focused squarely on doing everything we can to earn the trust of our customers and in the process change the banking sector for the benefit of the UK."

Costly RBS Scandals

Following the credit crisis, RBS has been rocked by numerous scandals, from market manipulation, to mass mis-selling, to nationwide IT failures.

In February 2013, RBS agreed to pay £390m to settle US and UK charges related to the manipulation of the benchmark lending rate known as Libor, as well as pleading guilty to a criminal charge of wire fraud from a Japanese subsidiary.

At the end of November last year, the FCA has asked a number of banks to confirm that they have not engaged in similar practices to those allegedly followed by RBS in which businesses were engineered into default while the firm profited from them.

Lawrence Tomlinson, an adviser to Britain's business secretary Vince Cable, claimed that RBS pushed businesses into default after moving them into its Global Restructuring Group (GRG).

The FCA only just kicked off its own review last month.

At the same time, RBS put aside another £3.1bn to settle claims over the mis-selling of payment protection insurance (PPI), mortgage products and interest rate swap agreements.

However, on top of all these problems, RBS is still having to tackle "decades of IT system investment failure," which left millions of customers unable to pay for goods and services or receive payments, after several service outages.

In tandem, the 12,000-strong RBOS Shareholder Action Group is taking the bank to court over allegations that the bank did not fully disclose its true financial condition prior to the government bailout.