Reports

Lockdowns Hit Coutts, Adam & Co Results; AuM Rises

Tom Burroughes, Group Editor, 4 May 2020

articleimage

Along with other major financial groups, Coutts and Adam & Co were hit by the COVID-19 pandemic by an expected rise in loan impairments and a cut in assets under administration. Income, however, rose in Q1.

The private banking arms of Royal Bank of Scotland – which is being renamed Natwest – sustained a drop in its first-quarter 2020 operating profit as impairment losses rose from a year earlier, while total income rose over the year.

Operating profit in Q1 was £49 million ($61.6 million), down from £80 million a year earlier at the Coutts and Adam & Co businesses of RBS, the UK-listed banking group said late last week. Return on equity fell to 9.8 per cent from 17.1 per cent. Total income, however, rose to £201 million from £193 million. 

The cost/income ratio widened a touch to 61.2 per cent from 60.6 per cent a year earlier, but was still way below the 69.2 per cent level at the end of December last year. 

Total assets under management rose to £24.3 billion at the end of March, from £23.2 billion at the end of 2019. Total AuM and assets under administration fell to £26.7 billion from £30.4 billion, RBS said.

“In what has been an incredibly challenging quarter, we are proud of the positive set of results which have been delivered. The £1.4 billion in net loans and advances is strong and marks a 10 per cent increase; and the £1.8 billion increase in deposits (7 per cent) is also most pleasing. Our risk-weighted assets increase of £700 million (7 per cent) being less than lending growth reflects the positive impact of our active capital management saving activities,” Peter Flavel CEO Coutts, said.

“Despite achieving a solid £49 million in trading profit over the quarter, there is no doubt that COVID-19 has impacted the business in a number of ways,” he said.

Register for WealthBriefing today

Gain access to regular and exclusive research on the global wealth management sector along with the opportunity to attend industry events such as exclusive invites to Breakfast Briefings and Summits in the major wealth management centres and industry leading awards programmes