RBS smashes targets to hit a billion-pound profit

Royal Bank of Scotland has posted a third quarter profit of £952 million, beating analysts estimates of a loss.

The bank gained £1.1 billion selling a chunk of its US retail bank Citizens, which floated on the New York Stock Exchange in September last year.

The sale helped balance out a £976 million hit from legal and misconduct costs and litigation, misconduct and restructuring costs. With the bank now back making money, the government can be more confident in its plan to sell shares and reduce its 72.9% stake.

The bank has also been quick to exit positions in emerging markets, which have had a terrible year thanks to slowing growth in China and crashing commodities prices.

“Exposure to most emerging markets decreased in 2015 as RBS continues to implement its strategy to withdraw from non-strategic countries. The drop in Chinese exposure in Q3 2015 reflected corporate loan sales and reductions in cash collateral due to reduced volumes of foreign exchange trading. Total exposure to Russia has halved during 2015 and the reduction in Q3 2015 was mostly due to corporate loan sales,” the bank said.

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