The biggest state-owned lender in the U.K. – Royal Bank of Scotland Group Plc made a statement revealing record results for the first quarter. The Group announced that its profit for the first financial quarter jumped threefold and reached 1.2 billion pounds (2 billion dollars) due to narrowed expenses and bad loans reduction. This result surpassed the analysts’ estimates of a 200-million-pound first-quarter profit.
Mr. Ross McEwan, who is the Chief Executive Officer of the bank, said in the Group’s statement, which was cited by the Wall Street Journal: “We still have a lot of work to do and plenty of issues from the past to reckon with.” He added: “We understand that this is a difficult position to put our main shareholder in. Im not going to pretend that this is ideal for us.”
Currently, 80% of Royal Bank of Scotland Group Plc is held by the country’s government. Recently it has been focused on consolidating positions and improving its performance, while undergoing a management reorganization.
Mr. Ross McEwan, who took the position of Chief Executive Officer in October 2013, has put his efforts in reorganizing the Group’s units and reducing the activity of the investment bank after RBS posted its largest annual loss in 2013 since the beginning of the global financial crisis.
Moreover, Royal Bank of Scotland continues to operate under great political pressure. Recently the government of the U.K. announced that it would not support the proposal of the Group to pay its employees bonuses that amount to double fixed payment.
Mr. Joseph Dickerson, who is one of the analysts working for Jefferies commented on the Group’s statement in an interview for the Financial Times: “All trends for this bank are going in the right direction, notably capital and impairments.”
Royal Bank of Scotland Group Plc surged 8.19% on Friday to close the session in London at 331.70 pence per share, marking a one year change of +7.94%. The lender is valued at 37.62 billion pounds. According to the Financial Times, the 26 analysts offering 12 month price targets for Royal Bank of Scotland Group Plc have a median target of 307.50 pence, with a high estimate of 445.00 pence and a low estimate of 210.00 pence. The median estimate represents a -7.30% decrease from the last price of 331.70 pence.
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