RBS Reports Wider First-Quarter Loss

By Max Colchester 

LONDON-- Royal Bank of Scotland Group PLC on Friday reported a large increase in its first-quarter net loss, following hefty restructuring charges and a one-off payment to the U.K. government.

RBS reported a net loss of GBP968 million ($1.41 billion) for the period, up from GBP459 million the year before. Revenue dropped 13% to GBP3 billion as RBS wound down its investment bank and sold off its U.S business.

The bottom line was hit by GBP1.2 billion payment to the U.K. government, which grants RBS the right to resume dividend payments to ordinary shareholders. The so-called Dividend Access Share was put in place in 2009 as part of the 73% state-owned bank's bailout.

The bank said it expects personal and corporate banking division income to remain broadly stable in 2016. Investment banking revenue is set to decline as heavy restructuring continues. Restructuring costs were GBP238 million in the quarter, down 47%, compared with the same quarter in 2015. Litigation costs were also much lower.

On Thursday the bank said it may struggle to meet a regulatory deadline to split out several hundred bank branches, raising fears over when the bank would resume its dividend and be privatized.

Following its 2008 government bailout RBS is required under European Union state aid rules to spin off 314 branches. These have been regrouped under the brand Williams & Glyn and need to be disposed of by the end of 2017.

Write to Max Colchester at [e-mail]

(END) Dow Jones Newswires

April 29, 2016 02:40 ET (06:40 GMT)

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