The wealth management arm of UK-based Royal Bank of Scotland logged an operating profit, before impairment losses, of £73 million ($117.4 million) in the three months to 30 September, up from £49 million a year ago.

The wealth management arm of UK-based Royal Bank of Scotland logged an operating profit, before impairment losses, of £73 million ($117.4 million) in the three months to 30 September, up from £49 million a year ago, while over the nine-month period, the firm's profit rose to £204 million from £187 million.

The business, which includes the firm’s flagship Coutts brand, had a net interest margin of 3.88 per cent, up from 2.96 per cent a year before; net interest income was £185 million at end-September, up from £152 million a year ago. The cost/income ratio of this division was 75 per cent, unchanged from the end of June but down from 82 per cent a year before.

Assets under management, excluding deposits, stood at £29.5 billion, a 4 per cent decline from the end of June.

“Assets under management declined by £1.1 billion, with £1.5 billion of net outflows of low margin custody assets in international markets only partially offset by favourable market movements of £0.4 billion. Lending and deposit volumes were broadly stable,” RBS said.

At the end of September, a total of 5,400 staff worked at the wealth arm of RBS, down from 5,600 in June this year.

Group results

RBS, which is part-owned by the UK taxpayer, has been shedding assets and streamlining its business to recover. Stephen Hester, chief executive, was upbeat about progress in recent months.

“The extraordinary challenges which RBS faced following the financial crisis are being worked through successfully. The five year restructuring Plan is now in its later stages with important work still to do, including an emphasis on dealing with reputational issues now that the bank's safety and soundness has advanced so well,” he said.

Across the whole of RBS, the firm said its third-quarter group operating profit rose to £1.047 billion from £650 million in the previous quarter and £2 million a year ago, while core operating profit rose 8 per cent from the previous three months and rose 67 per cent on the same period in 2011.

When the costs of payment protection insurance payouts and other impairments are taken into account, however, RBS posted a loss attributable to shareholders of £1.384 billion, compared with a loss on a similar basis of £1.226 billion a year ago.

At the end of September, RBS had a core Tier 1 ratio of 11.1 per cent, as measured under the Basel bank capital rules.