Five questions answered on RBS’s positive quarterly profit results

Investors react.

The bank that was famously bailed out in the 2008 financial crisis has posted its best quarterly profits for over a year. We answer five questions on RBS’s latest figures.

How much pre-tax profit has the bank made?

The bank has made a pre-tax profit of £826m, this is compared to a £1.5bn loss in the same period in 2012 and a £2.2bn loss in the final quarter of last year.

What has been the bank’s response to these positive results?

In a video statement on the bank’s website, Chairman Sir Philip Hampton said he expects the government to start selling shares in the bank from the middle of 2014, or possibly earlier, so the bank can return to privatisation.

He said any such sale would be "terrific for the country".

The government owns an 82 per cent stake in the bank after it bailed it out in 2008.

What else did Hampton say?

"Our balance sheet is substantially fixed... our operating profitability has come through quite strongly," he said.

"What we want to do is have a business that is performing well... enabling the government to start selling shares from, let's say, the middle of 2014 on - it could be earlier, that's a matter for the government - but certainly we think the recovery process will be substantially complete in about a year or so's time."

If the government sold its shares in the next year or so would they be getting a good deal?

It’s not known how much the government would sell its stake for, but currently, RBS shares are valued at 407 pence a share on the government's accounts. However, the government paid 502 pence a share during the bailout.

According to the BBC’s business editor, Robert Peston, this suggests the Chancellor, George Osborne, could opt to sell at the lower price and still claim to be getting fair value for the 82 per cent taxpayer stake.

This would result in a return to shareholders after the government invested billions in the bank five years ago.

How have investors reacted to the quarterly results?

Despite Hampton’s optimism, investors have reacted negatively, with RBS shares falling more than 4.5 per cent in the first 10 minutes of trading on the London Stock Exchange.

RBS. Photograph: Getty Images

Heidi Vella is a features writer for Nridigital.com

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PMQs review: Jeremy Corbyn prompts Tory outrage as he blames Grenfell Tower fire on austerity

To Conservative cries of "shame on you!", the Labour leader warned that "we all pay a price in public safety" for spending cuts.

A fortnight after the Grenfell Tower fire erupted, the tragedy continues to cast a shadow over British politics. Rather than probing Theresa May on the DUP deal, Jeremy Corbyn asked a series of forensic questions on the incident, in which at least 79 people are confirmed to have died.

In the first PMQs of the new parliament, May revealed that the number of buildings that had failed fire safety tests had risen to 120 (a 100 per cent failure rate) and that the cladding used on Grenfell Tower was "non-compliant" with building regulations (Corbyn had asked whether it was "legal").

After several factual questions, the Labour leader rose to his political argument. To cries of "shame on you!" from Tory MPs, he warned that local authority cuts of 40 per cent meant "we all pay a price in public safety". Corbyn added: “What the tragedy of Grenfell Tower has exposed is the disastrous effects of austerity. The disregard for working-class communities, the terrible consequences of deregulation and cutting corners." Corbyn noted that 11,000 firefighters had been cut and that the public sector pay cap (which Labour has tabled a Queen's Speech amendment against) was hindering recruitment. "This disaster must be a wake-up call," he concluded.

But May, who fared better than many expected, had a ready retort. "The cladding of tower blocks did not start under this government, it did not start under the previous coalition governments, the cladding of tower blocks began under the Blair government," she said. “In 2005 it was a Labour government that introduced the regulatory reform fire safety order which changed the requirements to inspect a building on fire safety from the local fire authority to a 'responsible person'." In this regard, however, Corbyn's lack of frontbench experience is a virtue – no action by the last Labour government can be pinned on him. 

Whether or not the Conservatives accept the link between Grenfell and austerity, their reluctance to defend continued cuts shows an awareness of how politically vulnerable they have become (No10 has announced that the public sector pay cap is under review).

Though Tory MP Philip Davies accused May of having an "aversion" to policies "that might be popular with the public" (he demanded the abolition of the 0.7 per cent foreign aid target), there was little dissent from the backbenches – reflecting the new consensus that the Prime Minister is safe (in the absence of an attractive alternative).

And May, whose jokes sometimes fall painfully flat, was able to accuse Corbyn of saying "one thing to the many and another thing to the few" in reference to his alleged Trident comments to Glastonbury festival founder Michael Eavis. But the Labour leader, no longer looking fearfully over his shoulder, displayed his increased authority today. Though the Conservatives may jeer him, the lingering fear in Tory minds is that they and the country are on divergent paths. 

George Eaton is political editor of the New Statesman.

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