Belfast Telegraph

Ulster Bank owner RBS blames PPI as £8m loss reported

Departing: Ross McEwan
Departing: Ross McEwan

By Lisa Smyth

Royal Bank of Scotland, which owns Ulster Bank, has tumbled to a loss in the third quarter after taking a £900m hit for payment protection insurance (PPI) claims.

The part-nationalised lender reported pre-tax operating losses of £8m for the three months to September 30, after reporting a £961m profit for the same period a year ago.

It posted attributable losses of £315m, against profits of £448m a year earlier. Shares dropped more than 2% after the results.

RBS - still 62% owned by the Government - blamed losses on the £900m bill for PPI following a last-minute surge in claims ahead of the August 29 deadline, as well as a "particularly challenging" quarter for its investment banking arm.

RBS also revealed another £55m in charges set aside for increased economic uncertainty in the third quarter as Brexit continues to take its toll.

Despite the third quarter losses, RBS said that it remained on track for full-year expectations in "uncertain times".

But it saw a relapse into the red after a robust first half, when it posted its highest interim profits in more than a decade and delivered a £1.7bn special dividend payout for shareholders, including the taxpayer.

The figures mark the last for boss Ross McEwan before he hands over to the lender's first female chief executive.

Mr McEwan leaves his post next Thursday, paving the way for Alison Rose to make history as she becomes the first woman to run one of the UK's biggest high street banks.

Chief financial officer Katie Murray said: "These results demonstrate our solid underlying performance in a tough operating environment.

"We have seen strong growth across the business and our sustained high levels of capital and liquidity mean we are well positioned to support our customers in these uncertain times."

The PPI bill was at the top end of the £600m to £900m range given last month when RBS cautioned over higher-than-expected claims ahead of the deadline.

Ms Murray said she would be "brave" to say the latest PPI charge draws a line under the saga, saying it was the group's "best estimate" to cover the cost of claims.

RBS said it was also seeing some signs of strain in the economy, with large firms holding back on investment amid Brexit uncertainty.

It also noted a slight increase in retail customers falling behind with repayments over the past year. However, it said this had started to flatten out.

Belfast Telegraph

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