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London - Royal Bank of Scotland said it made a pretax profit of £1bn in the second quarter, far better than analysts had expected, thanks to a turnaround in losses from bad loans, prompting it to release earnings a week early.
RBS, which is 81% owned by the British government, said the profit was mainly because of an economic upturn that allowed it to write back losses that had been booked on bad loans, giving it a net release of £93m.
That compared with £1.1bn of impairments in the second quarter of last year and expectations from analysts that it would book impairments of about £500m.
The bank made an operating profit of £1.3bn in the second quarter, up from £174m a year ago. Its £1.01bn pretax profit was in contrast to expectations that it would post a small loss, based on analyst forecasts compiled by the company.
RBS said it was obliged to release headline numbers early because they were far better than market expectations. It will release full results on August 1.
CEO Ross McEwan said the results showed the steady progress being made to make RBS "a much simpler, smaller and fairer bank".
"These results show that underneath all the noise and huge restructuring of recent years, RBS is a fundamentally stronger bank that can deliver good results for customers and shareholders," McEwan said.
The bank increased the amount it set aside to compensate customers for mis-selling payment protection insurance and interest rate swaps by ££250m.
