Brexit uncertainty responsible for fall in profits, Royal Bank of Scotland says
The Royal Bank of Scotland has pinned the blame on Brexit uncertainty after announcing a drop in its first-quarter profits yesterday.
The bank claimed that business customers were delaying decisions on borrowing until the nature of the UK’s future relationship with the European Union becomes clear.
The first three months of 2019 have seen net profits fall from £808 million in the same period in 2018 to £707 million this year.
However, this was ahead of the £546 million for the January to March period that was predicted by analysts.
“We recognise that the ongoing impact of Brexit uncertainty on the economy, and associated delay in business borrowing decisions, is likely to make income growth more challenging in the near term,” RBS said in a statement.
RBS also suggested that the impact on trade was confounded by the weaker economic outlook for the UK.
The Bank saw its shares decline by 4.4 per cent, down to 239p.
Revenue for the first-quarter of 2019 (£3 billion) also fell short of the £3.3 billion that analysts had projected.
However, plans to offset costs of £300 million over the course of the year are on track, with the first-quarter yielding a reduction of £45 million from the target figure.
In the wake of these revelations, RBS chief-executive Ross McEwan said: “[The numbers are] a solid set of results set against a highly uncertain and competitive backdrop”.
McEwan is set to stand down from his role within the next twelve months, following an announcement made on Thursday.