RBS joins Britain's other banks back in the black Go compare with our comparison table

RBS joins Britain's other banks back in the black

06 August 2010 / by Lois Avery

RBS has become the last of Britain’s major banks to announce a healthy return to profit this year.

After receiving a Government bailout during the financial crisis, RBS has posted a £9million profit for the first half of this year, compared with a loss of £1.4billion this time last year.

The bank is 83 per cent tax payer owned has seen a dramatic turnaround since 2008, when it reported a £24.1billion loss - the largest annual loss in UK corporate history.

Despite today’s good results RBS’s profit was considerably less than the UK’s other major banks, which have also posted better than expected results this week.

HSBC kicked the week of with an announcement of £7 billion, followed by Lloyds Banking Group and Barclays which also saw their balance sheets back in the black.

Investors’ confidence has been boosted by the news, which today pushed RBS’ share price up by 2 per cent.

Like the other banks RBS has thanked a reduction in bad loans for its return to profit. It also saw a reduction in costs after cutting 23,000 jobs worldwide at the peak of the financial crisis in 2008.

However, Chief Executive Stephen Hester said the bank still has a long way to go and is only 18 months into its five year recovery plan: “'The rebuilding of RBS is a marathon not a sprint.

“I am pleased with the steady momentum in our core customer-facing businesses. However, our path to the sustainable profitability and other improvements we target will not be linear, given the scale of management action in our core businesses, continuing risk reduction in non-core and the impact on both of a changeable economic and regulatory environment.”

As part of RBS’ five year recovery plan it has sold 318 branches to Spanish bank Santander this week.

The Share Centre has also warned that despite profitable results RBS still remains a risky investment, urging investors to see it as a sell opportunity.

“RBS is seemingly moving in the right direction with these results and although the five year plan makes sound business sense it still remains a high risk investment.  It is worth noting that the sooner the Government stake can be sold, the sooner the bank can start awarding dividends again.”

© Fair Investment Company Ltd

 Product NameISA OptionIncome YieldMore Info
Income Maximiseryes
See Details
More Info >
Seeks to achieve a target yield of 7% to generate a quarterly income, whilst offering the potential for some long-term capital growth. Save 100% on Initial Charges.
Monthly Income Plus Fundyes
See Details
More Info >
Popular monthly income fund that aims to achieve a high level of income whilst seeking to maximise total return through investing in high yielding corporate and Government bonds, together with UK equities. 100% discount on initial charges.
Click here to view latest Fund Facts »
Strategic Bondyes
See Details
More Info >
Investing in higher yielding assets which will include most types of fixed interest securities, this fund aims to deliver a quarterly income to investors. Save up to 97% on Initial Charges.
Invesco Perpetual Corporate Bond Fundyes
See Details
More Info >
This highly popular investment fund aims to achieve a high level of overall return with relative security to capital. Income Paid to you twice yearly. Up to a 100% Discount off the Standard Initial Fund Charge.
Click here to view latest Fund Facts »
Artemis Income Fundyes
See Details
More Info >
One of the leading UK Equity Income Funds. The Fund managers hunt out companies with strong free cash flow and solid balance sheets. Income is paid to you twice yearly. 100% Discount off the Standard Initial Fund Charge.
Click here to view latest Fund Facts »
Invesco Perpetual High Income Fundyes
See Details
More Info >
One of the UK's most popular income funds, the Invesco Perpetual High Income has delivered consistently good long term returns through a variety of market conditions. Income is paid to you twice yearly. Up to a 100% Discount off the Standard Initial Fund Charge.
Click here to view latest Fund Facts »
M&G Corporate Bond Fundyes
See Details
More Info >
The M&G Corporate Bond Fund is a conservative ‘blue chip’ sterling fund that aims to produce a higher return than UK government bonds. Income is Paid to you Quarterly. 100% Discount off the Standard Initial Fund Charge.
Jupiter Merlin Income Portfolioyes
See Details
More Info >
The Jupiter Merlin Income Portfolio fund aims to achieve a high and rising income with some potential for capital growth. Income Distributions are made to you quarterly. 95% Discount off the Standard Initial Charge.
Click here to view latest Fund Facts »
The value of investments and any return from them can fall as well as rise and you may not get back the full amount invested. Please ensure that you read the Important Risk Information below.