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BRITAIN-BANKING-EARNINGS-RBS
RBS profits almost wiped out on US fine
LONDON, Aug 3, 2018 (BSS/AFP) – Profits at Britain’s Royal Bank of
Scotland almost evaporated in the second quarter after a vast US fine over
its role in the notorious subprime crisis, the lender said Friday.
Earnings after taxation collapsed to just o96 million ($125 million, 108
million euros) in the three months to the end of June, RBS said in a results
statement.
That compared with o680 million in the same part of the previous year.
Operating profit halved to o613 million over the reporting period.
Edinburgh-based RBS was hit by o782 million in litigation and conduct
costs in the second quarter.
That helped to cover part of the vast settlement reached with US
regulators earlier this year over claims it mis-sold mortgages in the run-up
to the 2008 global financial meltdown and subsequent worldwide recession.
In May, RBS was fined $4.9 billion by the US Justice Department over its
role in the subprime housing crisis but much of the cost had already been set
aside, while the total was less than expected.
The lender remains majority-owned by the British government after
receiving the world’s biggest banking bailout at the height of the financial
crisis.
In June, the rightwing Conservative government headed by Prime Minister
Theresa May sold a 7.7-percent stake in RBS, leaving it still with a
controlling stake of 62.4 percent, much of which it plans to offload through
to 2023.
BSS/AFP/HR/1245