RBS Limps to Pre-tax Profit
RBS today closed the reporting season for banks by announcing a pre-tax profit of £15m for the first six months of the year.
Now then, without wishing to cast any aspersions, in a business of this size it’s not too difficult to make the figures tell a story, and clearly the message here is symbolic – ‘we’ve turned the corner, things are still tough, we’re not making too much money, thanks for all your support’.
Included in the figures is a £3.8bn profit on buying up existing debt in favourable market conditions.
“Let me be clear, I am optimistic for RBS’s future. We will rebuild attractive, sustainable shareholder value and, I believe, allow Government support to be recouped in full. But there will be no miracle cures. Our task is no less than one of the largest bank restructurings ever done, in the face of strong economic headwinds. Overall results may not substantially improve until 2011 and full recovery will take time. Along the way we will still need the Government support that gives us time and strength to restructure. We will repay that with results and responsible support to the communities who in turn are supporting us.”
Stephen Hester, RBS CEO
More noteworthy are rising impairments of £7.5bn – this figure will be seen as incredibly cautious, and probably as an attempt to finally clear the decks.
Stephen Hester, CEO, continued with his run of split-personality statements, sounding simultaneously troubled and positive, in an attempt to please both the media and the City.
The numbers came in slightly below consensus, but for RBS they are less important than the story.
Hester describes the results as ‘poor’, and this serves him well – engineering the hoped-for turnaround from this point will surely dispel any criticism of his remuneration.
Included in the announcement is a roadmap to 2013, an adventure likely to be no less thrilling than the road to the 2012 Olympics, showing their targets for recovery.
Can RBS fully recover before the velodromes, archery arenas and canoe slaloms are completed and handed back to an eager East London community? Stephen Hester, the government, pension funds and every taxpayer will hope so – the spotlight will continue to be on RBS for some time.