RBS share price down 4% after profits slide as Brexit uncertainty hurts margins

Royal Bank of Scotland (RBS) saw its share price fall more than 4% on Friday after it recorded a decline in Q1 profit, with the lender blaming Brexit uncertainty for its poor first quarter performance.

The bank also said that its performance was impacted by its hunt for a new CEO after its current boss Ross McEwan stepped

RBS results: key figures

The bank saw its net profit hit £707mllion, which exceeded the company’s consensus estimate of £546 million, but shy if the £808 million that the lender recorded in the same period a year prior.

RBS’ operating pre-tax profit for the quarter came in at £1.013 billion, down from the £1.213 billion recorded last year.

The lender said that it is still on track to meet its £300 million cost reduction target this year, with it already achieving a £45 million reduction in its first quarter.

Brexit uncertainty hurts RBS’ margins

The bank blamed its lacklustre start to the year on uncertainty caused by Brexit which has led to businesses curtailing investment and borrowing until there was a clarity on the UK’s future relationship with the EU.

In a call with reporters, McEwan argued that the bank’s Q1 figures represented a ‘solid set of results against an uncertain economic and political background’.

The lender also said that its growth was hindered by increased competition in the mortgage market.

‘While we retain the outlook guidance we provided in the 2018 Annual Results document, we recognise that 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,’ RBS said in its results.