Royal Bank of Scotland, the biggest British government-owned lender, said today Ulster Bank’s operating loss narrowed to £310 million (€382 million) in the first quarter as loan impairment charges declined from a year earlier.
This compared to a a £365 million operating loss for Ulster Bank during the same period in 2011, its Edinburgh-based parent said this morning.
Ulster Bank's impairment charge fell to £394 million from £461 million a year earlier, it said.
RBS said £1.9 billion, or 9.4 per cent, of its Irish unit’s residential mortgage book was "on a forbearance arrangement" at the end of March. Some 9.1 per cent of Ulster Bank's portfolio had such arrangements at the end of December. Some 75 per cent of loans in forbearance are classified as "performing" and not 90 days past due, it said.
Ulster Bank repossessed 46 residential properties in the first quarter, compared with 37 for the year-earlier period, it said. Half the repossessions in the first three months were through voluntary surrender or abandonment of the property, it said.
RBS, which is 82 per cent owned by the British government after being rescued during the 2008 financial crisis, reported a first-quarter operating profit of £1.2 billion, compared with a loss of £144 million the previous quarter and a consensus forecast of £800 million.
Chief executive Stephen Hester also confirmed that the bank will next week finish paying back the emergency loans it received from the British government in the midst of the financial crisis. It will also recommence payment of dividends and coupons on hybrid capital.
Profits were led by its reshaped and streamlined investment bank, which bounced back to an operating profit of £824 million in the quarter from a £109 million loss in the previous three months as capital markets improved.
Revenues in its new markets unit were £1.7 billion, more than double the fourth quarter but down 18 per cent from a strong year ago period. RBS also spent £271 million restructuring the investment bank.
“We are happy with progress in the first quarter although the economic and regulatory backdrop remains tough,” said Mr Hester.
“RBS continues, markedly, to regain strength and resilience.” Mr Hester said the bank was making excellent progress in removing the mistakes of the past with non-core assets being shrunk and liquidity strengthening.
Bloomberg/Reuters
