RBS posts six percent drop in profits, but impairments are down too

The bank’s most recent accounts show RBS reported a pre-tax profit of £871m for the three months ending September 30, compared to £1.2bn for the three months prior.

RBS said this was due to increased losses in its Capital Resolution department which manages high risk assets.

However, the bank said it’s on track for its cost, capital and lending targets.

RBS has nearly halved its impairment losses between September 2016 and September this year - from £553, to £259m.

As at September 30 2017, RBS’s total provisions for liabilities and charges were £7bn. Part of this total, but not all, comprises £2.8bn for residential mortgage-backed securities issues, £979m for PPI, £787m for litigation, and the remaining £828m for other customer redress issues.

The results also show litigation and conduct costs have shrunk for the first three quarters of 2017 compared to the same period last year -  from £1.7bn to £521m.

As for total provisions RBS has made in relation to PPI claims, this figure is £4.9bn. Of this figure, £3.9bn has been utilised in the nine months ending September 30 2017.

Earlier this week, the Financial Conduct Authority’s (FCA) review of RBS’s treatment of SME customers, that were transferred to its Global Restructuring Group (GRG), was branded a whitewash.

The FCA found there was no widespread or systematic inappropriate treatment of customers.

The team representing the SMEs, RGL Management Limited (RGL), said “The FCA is making excuses in its interim report as to why it cannot bring the bank to justice, which does nothing to help redress the devastation inflicted on business owners by RBS.”

RGL’s chief executive, James Hayward, said if the FCA cannot, or will not, take action against the bank then RGL is ready to do so.