Results round-up

Royal Bank of Scotland broke into the black in the first quarter of 2017, the first quarterly profit since 2015 as income, costs and margins all improved.

The taxpayer-owned bank swung to a net profit of £259m in the first three months of 2017, up from a £968m loss a year ago and the £4.4bn loss in the fourth quarter of last year.

Adjusted pre-tax profit of £1.4bn beat the consensus forecast of £0.9bn.

No dividend was proposed, as expected, but a reorganisation of RBS's share capital was proposed later this year to make it easier to pay dividends, which is expected to increase parent company RBSG's distributable reserves by around £30bn.

Across its core Personal & Business Banking (PBB), Commercial & Private Banking (CPB) and NatWest Markets (NWM) businesses, RBS lifted operating profits 30% to £1.3bn.

Group adjusted income of £3.2bn was 15.1% higher year-on-year, with net interest income of £2.2bn slightly higher than the first and fourth quarters of 2016.

There were still some sizeable exceptional costs, with restructuring costs of £577m for the quarter up by £339m compared with the same quarter last year, while the cost of provisions for litigation and fines was just £54m versus £31m a year ago but following the massive £4.1bn set aside in the final quarter of 2016.

Lloyds Banking Group’s first quarter profit increased with the part state-owned bank still on track to meet its 2017 targets.

Underlying profit increased 1% to £2.08bn compared to last year, and rose 16% compared to the previous quarter, with an underlying return on tangible equity of 15.1%.

Statutory pre-tax profit doubled to £1.3bn from last year, with a return on tangible equity of 8.8%.

The bank maintained a strong balance sheet with a CET1 ratio of 14.5% from 13.8% at the end of 2016, and tangible net assets per share increased to 56.5p from 54.8p at December end, driven by strong underlying profit.

The bank is on track to meet its financial targets for the year and it maintained its longer-term guidance. Net interest margin is now expected to be close to 2.8% and open book mortgage balances are expected to stabilise and then grow to close the year in line with 2016’s results.

While the asset quality ratio for 2017 is anticipated to be inside the existing 25 basis points guidance, capital generation will be at the top end of the 170-200 basis points ongoing guidance range and it expects to generate a statutory return on tangible equity of between 13.5% and 15% in 2019.

It also continues to target a cost-to-income ratio of around 45%, exiting 2019 with reductions every year.

The bank stressed that it was "determined that the victims of HBOS Reading are fairly, swiftly and appropriately compensated".