RBS Q2 positives first.
RBS is to pay its first dividend – £0.02 per share – since its government bailout in 2008.
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The UK government will as a result be able to reduce its 62.4% RBS stake in the current tax year.
Other RBS Q2 positives included an attributable profit of £96m ahead of market forecasts.
RBS’ private banking brands, Coutts and Adam enjoyed a positive first half. Operating profit for H1 rose by 85% year-on-year to £151m.
RBS Q2 digital highlights
RBS digital highlights included a 9% rise to 6.0 million of active mobile banking users. In addition, over 80% of RBS commercial customers are now interacting with the bank digitally.
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By GlobalDataLegacy issues continue to diminish with RBS’ agreeing a deal in principle with the US Department of Justice.
According to RBS CEO Ross McEwan the bank remains committed to reducing its cost-income ratio to below 50%.
RBS also maintains its targeted ROTE 2020 target of 12%+.
McEwan said: “We are pleased with the progress we’ve made in the first half of 2018 and see these as a good set of results in a more uncertain and highly competitive environment.
“Our sector is undergoing significant change and we are positioning ourselves well to compete. We still have a lot more to do, to achieve our ambition of being the best bank for customers in the UK and Republic of Ireland. However, with our major legacy issues largely behind us, we are able to fully focus on closing this gap.”
McEwan is correct to flag up that RBS is not yet out of the woods.
RBS Q2 net interest margin of 2.01% decreased by 3 basis points compared with the prior quarter. It also compares unfavourably with Lloyds margin of 2.93%.
RBS’ cost-income ratio of 70.4% in the first half rose by 60 basis points from the year ago period.
While Lloyds is already boasting a sub 50% cost-income ratio, RBS has much work still to do.
RBS Q2: Net Promoter Scores remain dire
Meantime RBS net promoter score shows no sign of moving in the right direction.
In Q2, the RBS NPS was -21.
By contrast, its English retail brand NatWest is at least in positive territory at +13 but the worst of its peers.
RBS Business Banking NPS of -23 follows five successive quarters when the metric has moved in the wrong direction.
