Skip to content
Subscriber Only

RBS First Profit in Decade Clouded by Costs and Litigation

  • Shares drop 4.5% in London, its biggest decline in a year
  • CEO says restructuring costs will be around 2.5 billion pounds
A Royal Bank of Scotland Group Plc logo sits on a bank branch in Edinburgh, U.K., on Thursday, March 2, 2017. Scottish First Minister Nicola Sturgeon said she'll start the legal process of preparing for a second independence referendum, threatening to open a new front in the Brexit battle as the U.K. government prepares to trigger negotiations.
Photographer: Matthew Lloyd/Bloomberg
Updated on

Royal Bank of Scotland Group Plc swung to its first full-year profit in a decade, but the delay in settling with the U.S. Department of Justice over a mortgage-securities probe and rising restructuring costs are casting a shadow on any celebrations. The shares fell.

Executives at the government-owned bank warned restructuring costs will be about 2.5 billion pounds ($3.5 billion) over the next two years, and that it may take further charges for litigation as discussions with the U.S. regulators remain beyond the company’s control. The restructuring costs are partially linked to the increased use of artificial intelligence and technology, as the lender aims to catch up with its competitors.