Banks, bonuses and the Big Five

Labour's two-pronged assault on the banking sector is trying to cement a view in voters' minds that the party is on the side of consumers

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RBS profits surge in first half of 2014

Profits at taxpayer-backed RBS have risen significantly in the first half of the year.

The bank said its preliminary results were "significantly stronger than the marked has been expecting", with an operating profit of £2.6bn compared to £708m in the first half of 2013.

RBS' profits for the first half of the year were much better than expected.
RBS' profits for the first half of the year were much better than expected. Credit: Philip Toscano/PA Wire/Press Association Images

However chief executive Ross McEwan issued a note of caution, saying there would still be "bumps in the road ahead" as the bank deals with various "legacy issues", such as the mis-selling of Payment Protection Insurance.

Along with the good news on profits, RBS also announced it had set aside an extra £250m to cover fines for mis-selling PPI and interest rate swap products.

Read: RBS boss admits 'shock' over depth of bank's problems

RBS in 'danger of failing' due to '£100bn black hole'

British taxpayers risk losing their entire £45 billion stake in Royal Bank of Scotland (RBS) which is in grave danger of failing within 10 years, according to an explosive new book.

According to the Independent on Sunday, a new study of the bank, which brought the UK to the brink of financial ruin, reveals RBS still has a £100bn “black hole” in its finances due to “five broad areas of alleged criminality and wrongdoing”.

Former Royal Bank of Scotland Chief executive Fred Goodwin Credit: PA

Financial journalist Ian Fraser, who wrote Shredded: Inside RBS, The Bank That Broke Britain, said: "The result has been that, at the time of writing, RBS is probably a worse bank than it was under Fred Goodwin.

“If the right moves are now made, RBS could become a great bank again. If they’re not, I doubt it will even exist in 10 years’ time".

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Shares climb but RBS chief says 'past issues' remain

Shares climbed an extra £2.5 billion adding to the value of Royal Bank of Scotland today after it said quarterly profits had doubled.

More: RBS profits rise to £1.64bn

RBS, which is 80% owned by the taxpayer, said profits before tax had risen to £1.64 billion from £826 million in the same period last year, prompting shares to rise by 13% after news broke this morning.

BS chief executive Ross McEwan said there were still "plenty of issues from the past to reckon with." Credit: Andrew Milligan/PA Wire

Shares settled at 9% - despite a warning from RBS chief executive Ross McEwan that there were still "plenty of issues from the past to reckon with".

Mr McEwan said the latest figures showed the "great job" it could achieve while in a "steady state.

Read: RBS 'still has work to do' after reporting pre-tax profits

RBS 'still has work to do' after reporting pre-tax profits

After the announcement of a pre-tax profit of £1.64 billion for Royal Bank of Scotland, Chief Executive Ross McEwan has said that his bank "still has a lot of work to do."

In a statement he said: "We still have a lot of work to do and plenty of issues from the past to reckon with.

"Everyone at RBS is focused squarely on doing everything we can to earn the trust of our customers and in the process change the banking sector for the benefit of the UK.”

Chief Executive Ross McEwan says that RBS still have a "lot of work to do" after reporting huge profits. Credit: Philip Toscano/PA Wire

Read more: RBS 'still has a long way to go' to rehabilitate itself

RBS report pre-tax profits of £1.6bn in quarterly report

The Royal Bank of Scotland have reported a pre tax profit of £1.64 billion for the first quarter for 2014, up from £826 million from last year.

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RBS Q1 results highlights: Operating profit £1.5bn (£747m Q1 2013); Capital ratio up to 9.4%; Cost to income ratio 66% (73% Q4 2013)

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Government stake blocks 200% RBS bonuses

The firm responsible for managing the Government's stake in Royal Bank of Scotland will vote down any resolution proposing bonuses of 200% of fixed pay, the part-nationalised bank has announced.

A branch of the Royal Bank of Scotland in Piccadilly Circus in central London.
Royal Bank of Scotland was part-nationalised following the 2008 financial crisis. Credit: Philip Toscano/PA Wire

RBS said UK Financial Investments informed the bank of its opposition to a 2:1 variable-to-fixed pay ratio - which it described as the "sector norm" - and therefore the board will not bring the proposal before its annual general meeting.

"The board acknowledges that this outcome creates a commercial and prudential risk," it added.

RBS may sue after accused of 'undermining small firms'

The Royal Bank of Scotland is considering legal action against the businessman behind a damning report that accused the taxpayer-backed lender of deliberately putting customers out of business for profit.

The Sunday Telegraph reported that the bank could have grounds to pursue a libel action against Lawrence Tomlinson after an inquiry into his allegations reportedly found no evidence to support claims that the lender’s turnaround unit had systematically engineered the collapse of small businesses.

In its report, Clifford Chance said it found “no evidence” to back up the most serious accusations made by Mr Tomlinson. Credit: PA

Jon Pain, the head of regulatory affairs at RBS, said: “The damage of the report has already been done and whether Mr Tomlinson offers any retraction or apology is a matter for him.

"These were the most serious allegations RBS has faced since the crisis and damaged RBS’s brand and undoubtedly harmed the value of the taxpayer’s interest.”

The law firm Clifford Chance on Thursday published the results of its investigation into the Tomlinson report which said it found "no evidence" to back up the most serious accusation.

RBS agrees £1.5 billion payout to taxpayer

Royal Bank of Scotland was bailed out by the Government in the last recession. Credit: PA

Royal Bank of Scotland has agreed to pay £1.5 billion to the taxpayer in a bid to return to the private sector.

The state-backed lender is hoping the move will allow it to resume future dividend payouts.

RBS, which is 80 per cent owned by the Treasury, has agreed the payout so its share price rises and it can break even on its £45 billion Government bailout.

Under its deal with the Treasury, the bank was unable to make payouts to ordinary shareholders.

It has now agreed to pay £320 million this year followed by another £1.18 billion to exit the arrangement.

Carney: RBS might have to leave independent Scotland

Governor of the Bank of England Mark Carney has warned that there is a "distinct possibility" that the Royal Bank of Scotland would have to move outside of Scotland in the event of a vote for independence.

Speaking to MPs on the Treasury select committee, Mr Carney said European laws require banks to have their head offices in the same member state as their registered offices. Asked if RBS would have to move to the remaining UK if voters backed independence, he said:

It's a distinct possibility but I shouldn't prejudge it.

It depends on their arrangements as well, if they were to adjust more into Scotland the minor management of the institution.

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