The Royal Bank of Scotland revealed better than anticipated first quarter results amid losing Ross McEwan, its chief executive officer, and going against Brexit uncertainty.
The net profit of the company amounted to £707 million ($912 million), much higher as compared to the consensus forecast of only £546 million. However, this is below the £808 million which was recorded in the same period in 2018. RBS also reported an operating profit before tax amounting to £1.013 billion as compared with £1.213 billion in the first quarter of the previous year. The income was lower at £265 million, however, the operating expenses also dropped by £73 million.
The bank released a warning regarding the many challenges that it faces over the next year.
RBS stated: “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.”
During the annual general meeting of the bank that was held in Edinburgh last Thursday, the bosses of RBS warned of Brexit affecting the economy, which in turn would have an effect on its bottom line.
Sir Howard Davies, the RBS chairman said to shareholders: “The UK economy has proved remarkably resilient but lack of clarity about our future relations with the EU is undoubtedly having an impact, with consumer confidence muted and many businesses pausing on investment.”
It added: “That will affect our income.”
Last October, RBS warned about the impact of Brexit and took a £240 million impairment charge, including £100 million to reflect the “more uncertain economic outlook” in the United Kingdom ahead of the nation leaving the European Union.
Meanwhile, last Thursday, the bank also announced that Ross McEwan was stepping down as the CEO and executive director of the bank. He is set to work his 12-month notice period until a replacement is found.
In a statement, Davies stated: “For the past five and a half years Ross has worked tirelessly to make the bank stronger and safer, and played the central role in delivering a return to profitability and dividend payments to shareholders.”