RBS boosts banking recovery hopes
Part-nationalised Royal Bank of Scotland has fuelled recovery hopes for the sector as it steadied the ship with a return to profit for the first half of 2010.
The bank's slim £9 million surplus - against a £1.04 billion loss a year earlier - came after improving bad-debt losses as it moved from a £248 million loss in the first quarter to a £257 million profit between April and June.
Chief executive Stephen Hester said turnaround plans for RBS were on track, but added the task ahead was a "marathon not a sprint". The recovery would not be steady and there was "plenty left to do", he warned.
RBS is the last of the UK's "big four" banks to report results this week. The break-even performance comes after stripping out factors such as one-off gains on its own debt.
HSBC and Barclays have been the strongest performers this week with profits of £7 billion and £3.9 billion respectively - as banks benefit from lower bad debts - although Lloyds also produced better-than-expected profits of £1.6 billion.
Mr Hester flagged up further staff culls ahead after 2,600 jobs losses at its insurance and retail banking arm already this year, bringing total cuts at the business since the crisis began to 22,600.
He warned: "It is absolutely inescapable in the modern world that we have got to be at the forefront of efficiency," he said.
The chief executive is also in the process of selling 318 branches to Santander as well as its credit card processing arm as it seeks to appease European competition concerns.
Hargreaves Lansdown head of equities Richard Hunter said RBS had ended the bank reporting season in "quietly confident" fashion.
Mr Hunter said: "The company has crept back into the black, further asset disposals should help focus future strategy and the new management team are well aware of the length of time any potential recovery may take."