RBS cites Brexit uncertainty as profits fall 12.5%

RBS reported an operating profit before tax of £1,013m compared with £1,213m in Q1 2018, reflecting £265m lower income, partially offset by £73m lower operating expenses.

In its interim statement, the Group said the "ongoing impact of Brexit uncertainty on the economy, and associated delay in business borrowing decisions, is likely to make income growth more challenging in the near term".

Graham Spooner, investment research analyst at The Share Centre, commented: “Following yesterday’s announcement that Ross McEwan will leave the bank in the next 12 months, this morning’s first quarter update has seen a 4.5% fall in the share price in early trading.

"Although operating profit at £1.01 billion was ahead of market expectations and the group remain on track to meet cost reduction targets this year, investors are more focussed on the uncertain short-term outlook due to Brexit uncertainty and the fall in revenue and net interest income which fell to 1.89%

“In their outlook the group reiterated the impact of Brexit on the economy and associated delays on businesses making borrowing decisions, which in turn will make for a more challenging near term with regard to income growth. Although this view should not come as a major surprise it does once again focus minds of investors who have become fatigued with Brexit on the possible consequences."