Reports

RBS' Wealth Arm Reports Slight Dip In Pre-Impairment Operating Profit; New CEO For Group

Tom Burroughes, Group Editor, London, 2 August 2013

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The wealth arm of Royal Bank of Scotland reported an operating profit before impairments in the six months to 30 June of £119 million ($179.9 million), down from £126 million in the same period a year ago. RBS also announced the new CEO.

The wealth arm of Royal Bank of Scotland – including Coutts, the
private bank – today reported an operating profit before impairments in the six
months to 30 June of £119 million ($179.9 million), down from £126 million in
the same period a year ago. Separately, RBS announced the new chief executive
to take over the helm from Stephen Hester, who is stepping down.

In the three months to end-June, the wealth segment of RBS
reported a pre-impairment operating profit of £58 million, down from £61
million, the UK-listed bank, which is part-owned by the UK taxpayer, said in a statement.

Operating profits in the half-year period at the wealth arm
were £112 million, up from £104 million. Impairment
losses in the half-year period were £7 million, down from £22 million a year
earlier.

The wealth division employed a total of 5,100 people at the
end of June, unchanged from the end of March and end of December last year. The
cost/income ratio of the wealth business was 78 per cent in the half-year
period, down from 79 per cent a year earlier. Total income was £545 million,
down from £593 million in the six months to 30 June 2012.

Assets under management – excluding deposits – stood at
£31.1 billion, up from £30.8 billion at the end of March; customer deposits
stood at £38.0 billion, down from £39.6 billion at the end of March.

Group results, new CEO

For the banking group as a whole, it reported a profit
attributable to ordinary and B shareholders of £535 million in the six months
to 30 June, contrasting with a loss of £2.032 billion in the same period of
2012.

In the three months to end-June, RBS logged a profit
attributable to shareholders of £142 million, down from £393 million in the previous
quarter. Total income in the half-year period was £10.6 billion, down from £11.685
billion a year before.

“RBS' journey from 'bust bank' to 'normal bank' is largely done. But no small task remains - to harness
the energies and strengths that have driven the bank's recovery, and to take
RBS towards the target of being a 'really good bank' for customers,
shareholders and society as a whole,” Stephen Hester, the outgoing
chief executive, said in the statement. Hester, who took up the role in October
2008 amid the worst of the financial crisis, announced he would not seek a
further term at the helm earlier this year, prompting speculation that he had
been unhappy at the UK
government’s intentions towards RBS.

RBS announced that Ross McEwan has been appointed as a director
and group CEO from 1 October. McEwan joined RBS as the UK retail CEO
in September last year.

Philip Hampton, RBS chairman, said: "This is a job that
is among the most important and challenging in the business world, and Ross has
shown that he has the drive and capability to take it on. I conducted an
international search for this position so our internal candidates could be benchmarked
against the very best in the market. Ross was the strongest candidate and I am delighted
he has been appointed.”

 

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