Dow Jones Newswires: Royal Bank of Scotland swings to loss after higher PPI costs

Royal Bank of Scotland Group PLC on Thursday reported a swing to a pretax loss for the third-quarter after booking extra PPI costs following a late surge in claims ahead of the August deadline, as previously guided. The majority-state-owned bank

RBS, -1.30%

RBS, -2.74%

 booked a 900 million pound ($1.16 billion) provision to cover payment protection insurance costs. It said in September that the bank expected to book a provision of GBP600 million to GBP900 million. The London-listed lender made an pretax loss of GBP8 million for the quarter ended Sept. 30, compared with a profit of GBP961 million in the year-earlier period, after returning to profitability in 2017. RBS’s net loss came to GBP315 million, compared with a profit of GBP448 million a year earlier. Total income for the quarter fell to GBP2.90 billion from GBP3.64 billion in the year-earlier quarter. Net interest income fell to GBP2.01 billion from GBP2.15 billion a year earlier. RBS said its net interest margin, the difference between the money it earns on lending and pay out on funding, decreased by seven basis points compared with the second quarter. RBS ended the quarter with a common equity Tier 1 ratio–a key measure of balance-sheet strength–of 15.7%, which included a 50 basis point reduction in respect of the PPI charge. The bank also reaffirmed its previous outlook guidance for the full year, with revenues forecast to be GBP12.31 billion, taken from FactSet and based on 15 analysts’ estimates.

                  

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