Security matters: Banks are increasingly sensitive to the brand damage caused by IT failings, perceiving customers to care just as deeply about security and stable service as loan or deposit rates. — Reuters
London: Britain’s state-rescued Royal Bank of Scotland rebounded into profit in the second quarter and is preparing to use Amsterdam as a post-Brexit EU base, it said on Friday.
Earnings after taxation hit 680 million pounds (US$900 million) in the three months to the end of June, the lender said in a statement. That contrasted sharply with a net loss of 1.077 billion pounds a year earlier, when its performance was skewed by huge litigation costs.
Turning to its Brexit contingency plans, the troubled bank said it was engaging with the Dutch central bank to use its existing banking licence in the Netherlands.
The lender, which is 71% owned by the government after a vast bailout during the global financial crisis, needs EU “passporting rights” to continue operating its NatWest Markets investment banking division across the bloc.
”NatWest Markets has reviewed ways to minimise disruption to the business and continue to serve its customers well in the event of any loss of EU passporting,” RBS said. ”Should the outcome of the current EU separation negotiations make it necessary, NatWest Markets is ensuring our existing RBS N.V. banking licence in the Netherlands is operationally ready.”
UK-based banks and other financial firms face losing so-called passporting rights to sell services to clients operating in the European Union once Britain definitively quits the bloc in March 2019.
Earlier this week, Japanese megabank MUFG said Amsterdam and Paris are favourites to be the new European base for its securities operations, as it prepares for Brexit.
Germany’s largest lender Deutsche Bank and US banks Citigroup and Morgan Stanley have all indicated that they will move jobs and some operations from London to Frankfurt.
RBS was slapped by US regulators last month with a US$5.5 billion fine over its role in the subprime mortgage crisis more than a decade ago.
However, the bank only took a 151 million charge in the second quarter as a result of the deal. It has yet to reach a settlement with the Department of Justice. - AFP
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