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RBS profits plunge as it prepares for flood of new PPI claims

By Ramla Soni

Bank reports third-quarter net loss of £315m after setting aside £900m to handle mis-selling scandal

Royal Bank of Scotland (RBS) reported a third-quarter net loss of £315m ($406.9m) on Thursday, after putting aside another £900m ($1.16bn) to compensate customers who were mis-sold payment protection insurance on loans and credit cards.

There has been a flood of late claims in Britain’s biggest consumer banking scandal ahead of the August 2019 cut-off.

The state-backed bank’s stock was down 2.4 per cent after it reported an £8m pre-tax loss in the three months to the end of September, compared with a £961m profit for the same period last year. It missed a £988million profit forecast from Reuters.

Alison Rose is due to take over from departing chief executive Ross McEwan and will head a new-look management team from 1 November, Reuters reported.

RBS also reported a challenging quarter in its investment bank, NatWest Markets (NWM), where total income came in at £150m, falling by £419million compared with the third quarter of 2018.

The bank’s third-quarter net profits for the same period last year were £448m, when it set aside £100m to handle economic uncertainties such as Brexit.

Operating expenses were £2.6 billion up from £2.4 billion a year ago.

Meanwhile Metro Bank’s founder, Vernon Hill has resigned as chairman with immediate effect, weeks before he was expected to step down. The high street bank said Mr Hill, who founded the bank in 2010, would stay on as a non-executive director until December 31.

The announcement came before the bank’s third-quarter results, revealed yesterday, showed a £6.7m loss in the three months to September, compared with £900,000 in the second quarter.

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