RBS warns of ‘significant’ impact of Scottish independence

Royal Bank of Scotland says a yes vote on Scottish independence could significantly increase its costs and have a material impact on its business.

As part of its interim results statement RBS announced a 93 per cent rise in profits to £2.65bn, up from £1.34bn in 2013 but raised concerns over the possible results of the Scottish referendum.

The RBS results say independence “could significantly impact the group’s costs and would have a material adverse effect on the group’s business financial condition, results of operations and prospects.”

It added uncertainties resulting from a “yes” vote would be likely to significantly impact its credit ratings and “could also impact the fiscal, monetary, legal and regulatory landscape to which the group is subject”.

RBS almost doubled profits in the first half of 2014, but the bank is warning expected costs from conduct and litigation issues are likely to hit future results.

The bank states it advanced £9.8bn to mortgage customers in the first half of 2014, giving it a 9.9 per cent share of the market.

RBS has set aside a further £150m for redress relating to missold payment protection insurance, and £100m for interest rate swap redress. It has not aside a total of £3.25bn for PPI compensation, and £1.85bn for swaps redress.

Over the six months, RBS’s total income fell by 6 per cent to £9.97bn, largely as a result of its corporate and institutional banking unit shrinking by 10 per cent. £2.1bn of its income came from fees and commission.

The bank made a gain of £191m from the sale of its remaining holding in Direct Line in Q1.