Royal Bank of Scotland (RBS) has recorded profits of £1.62bn for 2018, more than double the £752m it made a year earlier.
The bank reported a pre-tax operating of £572m in the fourth quarter of 2018 alone, and first fourth quarter bottom line profit in eight years of £286m.
Commenting on the results, RBS CEO Ross McEwan said: “This is a good performance in the face of economic and political uncertainty, with bottom line profits more than doubled from the previous year.
However, speaking to the BBC, McEwan noted that “larger corporations are pausing on their investments”, suggesting that the Brexit could have a bigger impact on the economy than the Bank of England has forecast.
“[Larger corporations pausing on their investments] cannot be good for the economy long-term because those large corporations then employ smaller businesses and individuals,” he said.
“If this goes on for a long period of time we're going to see the economy slowing down more than the Bank of England suggested.
"We have a very small period of time left until the end of March and it's time that our politicians got to the conclusion so that we can get some certainty going forward."
Furthermore, the lender, that is still 62 per cent state-owned, made £3bn of funding available through a Growth Fund to help businesses ready their supply chains for the UK’s departure from the European Union in 2018, despite Brexit uncertainty.
RBS has proposed to pay a final dividend of 3.5p, following the 2p interim dividend, and a special dividend of 7.5p, taking total dividend payments to shareholders in 2018 to £1.6bn, which means the Treasury is set to receive £977m.
McEwan added: “We are also announcing an intention to pay back more capital to shareholders and almost £1 billion is set to be returned to UK taxpayers for 2018.
“With strong capital and liquidity levels, we are well positioned to support the UK economy. Our total lending to business and commercial customers reached over £100 billion at the end of 2018.”
Also commenting, The Share Centre investment research analyst Graham Spooner commented: “RBS’ final year results delivered this morning were something of a mixed bag. Bulls will see progress in its long- term restructuring plan appears to be showing through, especially with the payment of a special dividend of 7.5 pence on top a final dividend of 3.5 pence.
“Yet on the flip side, the outlook for the year ahead, however, is fairly downbeat with the statement pointing to significant risks and uncertainties in the external economic, political and regulatory environment. The net interest margin for the year was 1.98%, lower than in 2017, but it did rise over the fourth quarter compared to the third quarter.
“The shadow of impairments looks likely to remain over 2019 with the group forecasting they are expected to still rise, although not as high as some forecasts, and the 2020 cost to income ratio targets look ‘increasingly challenging’, with Brexit likely to increase costs.”
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