LONDON: Royal Bank of Scotland on Friday announced a 14-percent rise in quarterly net profit but warned of a “more uncertain outlook” as Britain’s struggles to strike a Brexit deal.
Profit after tax rose to £448 million ($574 million, 505 million euros) in the third quarter to September compared to the same period in 2017, RBS said as it continues to recover after a record government bailout a decade ago at the height of the financial crisis.
RBS announced also that it had set aside an additional £100 million to cover bad loans, “reflecting the more uncertain economic outlook”.
Analysts reckoned this clearly referred to Brexit uncertainty following recent warnings by RBS chief executive Ross McEwan, who earlier this month said that a no-deal Brexit risks sending the British economy into recession in 2019.
“RBS has taken a Brexit blow of £100 million, an impairment of its assets to reflect what it believes is greater economic uncertainty,” said Laith Khalaf, senior analyst at stockbroker Hargreaves Lansdown.
“This serves as a reminder that the bank’s fortunes are very heavily influenced by the domestic economy.”
