London: Royal Bank of Scotland Group (RBS) said pretax profit is seen almost doubling in the first half and forecast to meet its target to cut costs by one billion pounds ($1.7 billion) in 2014. The shares soared.
Pretax profit at Britain's largest state-owned lender may have increased to 2.65 billion pounds from 1.37 billion pounds a year earlier, RBS said in a statement yesterday. Operating profit probably jumped to 2.6 billion pounds from 708 million pounds, according to the results, which were released a week early.
Chief Executive Officer Ross McEwan, who took over from Stephen Hester in October, is setting up an internal bad bank, combining divisions and scaling back the investment bank as he strives to shore up earnings at RBS after the lender reported its biggest annual loss since the financial crisis last year. RBS said on Friday that it's still facing "significant conduct and litigation issues" that could hurt future profit.
"This was an extremely good set of results," said Chirantan Barua, an analyst at Sanford C. Bernstein in London, who rates RBS shares outperform.