Q3 2014 Trading Update
RBS today provides an update on Q3 2014 financial performance.
- Q3 2014 has seen continued improvement in economic conditions and asset prices in our key markets, including Ireland. This has supported a further quarter of strong operating performance by RBS Capital Resolution (“RCR”). We anticipate that RCR will record net impairment provision releases in the region of £0.5bn in Q3 2014.
- RCR’s future overall costs and speed of wind-down remain subject to significant potential volatility. The potential exists, if market conditions remain favourable, for RCR to incur limited future impairments and disposal losses, and an accelerated timetable to achieve its wind-down goals.
- Rising Irish residential property prices combined with pro-active debt management has resulted in lower arrears in Ulster (excluding RCR), within Personal & Business Banking. As a result we expect Ulster to record net provision releases in the region of £0.3bn in Q3 2014. The potential exists for further releases in future, if market conditions continue to improve.
- There has been an absence of large one-off impairments and lower levels of new non-performing loans in the rest of RBS’s business during Q3 2014.
- RBS now expects to significantly outperform its previous guidance of c£1bn total impairments for FY 2014. Previously disclosed uncertainties remain, particularly relating to conduct and litigation matters.
- Corporate & Institutional Banking revenues have been weaker than anticipated in the third quarter.
- RBS took advantage of improved market prices to dispose of c€9bn legacy available for sale debt securities. These disposals generated a loss of around £0.2bn in Centre revenues. We expect these transactions to be moderately capital ratio accretive.
The figures quoted in this statement are preliminary estimates and unaudited. RBS will release its Q3 2014 Interim Management Statement on 31 October 2014.
Presentation at Bank of America Merrill Lynch Banking & Insurance Conference
Ross McEwan, RBS Chief Executive, presented today, Tuesday 30th September at the Bank of America Merrill Lynch Banking & Insurance Conference in London.
A recording of the audio webcast and accompanying slides is available on our investor pages.