Ups and downs as RBS rides the waves of credit crisis - Yorkshire Post
Ups and downs as RBS rides the waves of credit crisis - Yorkshire Post:
Ups and downs as RBS rides the waves of credit crisis
ROYAL BANK OF SCOTLAND, the UK's second biggest bank, revealed a sharp increase in profits to £10.3bn, but warned of further losses from the credit crisis.
Underlying 2007 profits rose nine per cent, but total write-downs on investments hit by last summer's financial turmoil and the United States sub-prime crisis rose to £2.5bn.
RBS's credit crunch losses totalled £1.6bn, while write-downs at ABN Amro – the Dutch bank it bought last year – were £900m.
RBS said its investment banking division had been held back by the turmoil in credit markets, although the bank managed to counter the losses with the sale of businesses such as utility Southern Water last year.
Despite the deterioration in the economic environment, a more cautious approach to lending saw RBS' overall bad debt losses fall one per cent to £1.87bn. The group, which owns the NatWest bank, said that retail banking profits rose 10 per cent to £2.47bn and deposit balances rose nine per cent.
UK business banking saw an 11 per cent increase in operating profits to almost £2bn, offsetting declines in investment banking.
Chief executive Sir Fred Goodwin said prospects for 2008 were "difficult as ever to predict", but said there was good momentum behind the enlarged bank.
Aside from banking, RBS is also the UK's largest motor insurer. It said yesterday it expected premiums to rise at least as fast as the cost of paying claims in 2008.
Competitive pressures and the increasing popularity of price comparison websites have battered UK motor insurers.
RBS, which owns some of Britain's best-known insurance brands, including Direct Line, Churchill, Privilege and Green Flag, has a strong insurance presence in Yorkshire. Direct Line, Privilege and the motor business Green Flag employ 3,335 people in Leeds, Sheffield, Doncaster and Pudsey. Nearly 9,000 RBS staff live in Yorkshire.
In 2007, the RBS Insurance division posted a nine per cent drop in overall operating profit to £683m hit by £274m of losses related to floods. Excluding those losses, profits would have climbed almost 28 per cent.
RBS's credit crunch losses totalled £1.6bn, while write-downs at ABN Amro – the Dutch bank it bought last year – were £900m.
RBS said its investment banking division had been held back by the turmoil in credit markets, although the bank managed to counter the losses with the sale of businesses such as utility Southern Water last year.
Despite the deterioration in the economic environment, a more cautious approach to lending saw RBS' overall bad debt losses fall one per cent to £1.87bn. The group, which owns the NatWest bank, said that retail banking profits rose 10 per cent to £2.47bn and deposit balances rose nine per cent.
UK business banking saw an 11 per cent increase in operating profits to almost £2bn, offsetting declines in investment banking.
Chief executive Sir Fred Goodwin said prospects for 2008 were "difficult as ever to predict", but said there was good momentum behind the enlarged bank.
Aside from banking, RBS is also the UK's largest motor insurer. It said yesterday it expected premiums to rise at least as fast as the cost of paying claims in 2008.
Competitive pressures and the increasing popularity of price comparison websites have battered UK motor insurers.
RBS, which owns some of Britain's best-known insurance brands, including Direct Line, Churchill, Privilege and Green Flag, has a strong insurance presence in Yorkshire. Direct Line, Privilege and the motor business Green Flag employ 3,335 people in Leeds, Sheffield, Doncaster and Pudsey. Nearly 9,000 RBS staff live in Yorkshire.
In 2007, the RBS Insurance division posted a nine per cent drop in overall operating profit to £683m hit by £274m of losses related to floods. Excluding those losses, profits would have climbed almost 28 per cent.
posted by Mugenzi @ 5:29 pm
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