The outlook at RBSs private banking division is substantially rosier than this time last year, with operating profits rising from £62 million in Q1 2010 to £80 million in Q1 2011
by Sophie McBain
The outlook at RBS’s private banking division is substantially rosier than this time last year, with operating profits rising from £62 million in Q1 2010 to £80 million in Q1 2011. This is 8 per cent down on Q4 2010, but impairment charges on bad debt have decreased from £6 million to £5 million in the last quarter. The number of assets under management also grew 7 per cent in the last three months.
In its quarterly report, released today, the bank announced a new strategy which ‘focuses on a narrower range of territories, balancing mature and growth markets, where the Coutts brand is strong and resonant,’ and a new IT platform to improve customer service in its private banking branch.
RBS’s investment arm posted an operating profit of £1.1 billion in the first quarter of this year, but the part-nationalised bank’s Global Banking and Markets division remains volatile. The bank’s investment branch doubled its operating profit between Q4 2010 and Q1 2011, but it was unable to match the £1.5 billion profit generated in the first quarter of last year.
Overall, the bank posted a £528 million loss, compared to a slight profit of £12 million last quarter, despite a 9 per cent decrease in impairment charges to £1.9 billion.
Notably, while Lloyd’s quarterly report published on Thursday contained £3.2 billion provisions for PPI payout costs, RBS declined to place a figure on its liability, saying that ‘the uncertainties around the outcome of the PPI action mean that, at this time, the Group is unable reliably to estimate any potential financial liability, although it could prove to be material.’