RBS made just £2m last quarter

The bank, however, posted an attributable profit of £952 million as it continued to trim its stake in its U.S. unit Citizens. That missed expectations for a profit of £988 million. However, the gain was all but eradicated by a GBP1 billion loss at RBS’s investment bank amid restructuring charges to make it smaller. On Friday the bank raised its cost-cutting target to over GBP900 million for the year, up from GBP800 million. RBS said it wants to return its focus to the UK.

‘The capital improvement part of our thesis is intact, ‘ he added, arguing the proceeds of the Citizens sale implied a common equity Tier 1 ratio of 16.2%, meaning around £8 billion of excess capital. RBS operates in the United Kingdom, the United States and internationally through its principal subsidiaries, The Royal Bank of Scotland plc (the Royal Bank) and National Westminster Bank Plc (NatWest).

The division lost $411m when costs tied to litigation and restructuring are excluded, compared with a profit of $32.2m previous year.

RBS, which is now 73 percent owned by the government, has given similar warnings in the past given the uncertainty surrounding ongoing investigations. The bank warned of “material further and incremental costs and provisions in respect of conduct and litigation” which could be “substantially greater” than the provisions RBS has made. On Friday the bank took an extra litigation charge of GBP129 million to cover a lawsuit related to the sale of mortgage-backed securities. “We’ve dealt with some this year, particularly around foreign exchange, we still have a few more to see through that I’d like to see before the end of this year”, Ross McEwan, CEO of RBS, said.

In July the Government began the process of privatising RBS by selling a £2.1 billion stake in the bank – at a loss of more than £1 billion to the taxpayer.