Royal Bank of Scotland Posts Record Profits Amidst Economic Uncertainty

The Royal Bank of Scotland has reported a significant 32% increase in pre-tax profits to just over $1 billion, with a record $43 million profit-sharing scheme for employees. However, the bank has warned of uncertain economic times ahead, particularly in the Far East and Russia, where it has set aside $146 million to cover possible bad debts.

Key Takeaways:

• The Royal Bank of Scotland reported a 32% increase in pre-tax profits to just over $1 billion, a first for the 271-year-old institution.
• The bank's profit-sharing scheme will give employees a record $43 million, an extra 10% of their salary.
• The bank has set aside $146 million to cover possible bad debts from current lending in Asia, with over 50% allocated to Indonesia.
• Direct Line, the bank's telephone insurance operation, increased its profit for the year to $64 million from $36 million last time.
• The bank's UK banking operations reported record returns, with a 15% increase in profits before exceptional items to $680 million.
• Citizens, the bank's US operation, saw its profits grow by 31% to $247 million.
• The bank has also been successful in growing its income by an average of 15% a year during the last five years.

Statistics:

• Pre-tax profits increased by 32% to $1 billion.
• Total income for the banking group, excluding exceptional items, went up 22% to $3.6 billion.
• The bank has set aside $146 million to cover possible bad debts from current lending in Asia.
• Direct Line's profit increased by 77% to $64 million.
• Citizens' profits grew by 31% to $247 million.
• The bank's UK banking operations reported a 15% increase in profits before exceptional items, to $680 million.
• The bank's net income for the UK and US Citizens banking operations reached a record high.

Sources:

• The Royal Bank of Scotland (press release)
• The Times
• The Financial Times
• BBC News
• Ian Burrell (THE Royal Bank of Scotland)