Royal Bank of Scotland announced it would miss the deadline to sell its Williams & Glynn bank on Friday, alongside a £469 million loss for the third quarter.
The bank made a £2.5 billion loss for the first nine months of the year, with its £469 million loss between July and September more than double the amount expected by analysts. Major restructuring and “legacy issues” continue to affect the bank’s progress in the wake of its £45.5 billion government after the financial crisis.
RBS chief Ross McEwan confirmed that it would miss the deadline to sell its Williams & Glynn bank, set by the European Commission for the end of 2017. It was ordered to sell the banking business to prevent RBS having too dominant a position in the market, and has already missed the first deadline of November 2013 without receiving a penalty from the European body.
Earlier this week Clydesdale Bank confirmed it had made an offer for Williams & Glynn, after a deal with Santander fell through.
Investors reacted positively to the news, sending shares up over 5 percent in early trade. McEwan commented:
“We’ve said that 2015 and 2016 would be noisy as we work through legacy issues and transform this bank for customers.
“These results reflect that noise. Our core business results were good with a £1.3bn adjusted operating profit, our best quarter since 2014.
“The core business has now delivered on average over £1bn in adjusted operating profit for the last seven quarters.”
RBS (LON:RBS) is still 73 percent owned by the government following its emergency bailout in 2008.
“RBS has yet to emerge from the weight of misconduct fines, restructuring costs, the distraction of the sale of the Williams & Glyn unit, the spectre of the government stake and the lack of a dividend payment,” said Richard Hunter, head of equities at Wilson King Investment Management, told the BBC.
“Meanwhile, the bank’s longer term targets have also been temporarily shelved in the face of its ongoing challenges.”