RBS annual profit doubles to £1.6bn

Royal Bank of Scotland has reported profits of £1.62bn for 2018, more than double the £752m it made in 2017.

The bank, which is 62%-owned by the government, said it would pay £977m to the Treasury through dividend payments.

RBS chief executive Ross McEwan said: “This is a good performance in the face of economic and political uncertainty.”

Mr McEwan also said the UK economy faced “a heightened level of uncertainty related to ongoing Brexit negotiations”.

He told the BBC: “What we’re seeing already in the market place, and this has been happening over the last few quarters, is larger businesses have been pausing on their investments in the UK.

“And over time that does trickle down into small businesses who support those larger businesses and therefore jobs and money that comes into this economy.

“We have a very small period of time left until the end of March and it’s time that our politicians got to the conclusion so that we can get some certainty going forward.”

He said that 2018 saw benign economic conditions continue, with low defaults by customers on their loans.

But the bank’s statement noted the potential impact of “ongoing political uncertainties and geopolitical tensions” which could affect its customers, and, as a result, defaults were expected to increase this year.

Digital uptake

RBS has continued with its plan to shrink itself. Its assets, which in banking means its outstanding loans, shrank from £738.1bn to £694.2bn.

Before the financial crisis, it was briefly the largest bank in the world by assets.

The bank said the switch from physical to digital services was continuing to grow rapidly.

RBS said 6.4 million customers now regularly used its mobile app, 16% higher than in 2017.

Competition in the mortgage market meant profit margins remained thin, it said.

Its net interest margin – the difference between what it pays for deposits and what it charges for loans, and a key measure of a bank’s ability to make money – shrank to 1.98% from 2.13%.