London
Royal Bank of Scotland on Friday announced a £1.7 billion ($2.06 billion) dividend, but warned that a tough economic environment ahead of Brexit means it is likely to miss its profitability and cost targets for next year. The state-backed lender posted stronger than expected half-year pretax profits of £2.7 billion, above forecasts of £2.3 billion according to a company-provided average of analyst forecasts.
The figure was up 48 percent on £1.8 billion the previous year, largely lifted by a £700 million boost from selling its stake in Saudi bank Alawwal. Without this one-off boost, pretax profits came in at £2 billion, just ahead of consensus forecasts for £1.9 billion.
But the bank said a tough outlook would make it “very unlikely” to meet its target of achieving a 12 percent plus return on tangible equity. It said it would struggle to reduce its cost to income ratio to below 50 percent by 2020, although said this remained its medium term goal. The lender followed up on its first full-year dividend in a decade with an interim dividend of 2 pence per share and a special dividend of 12 pence.
The UK government, which owns 62 percent of the lender following a financial crisis bailout, will receive a billion pounds of that. RBS gave no update on its search for a new CEO. Outgoing head Ross McEwan (below), 62, said in April he planned to retire within the next year. —Arab News
