British state-backed lender
Royal Bank of Scotland said its profits halved in the first quarter, as it set aside 802 million pounds ($1.01 billion) against a likely spike in bad loans due to the coronavirus pandemic.
RBS on Friday posted pre-tax profits of 519 million pounds for the period, down from 1 billion pounds the previous year, just ahead of the 415 million pound average of analyst forecasts compiled by the bank.
Britain's biggest four banks - RBS, HSBC,
Barclays and Lloyds - have set aside a combined 6.7 billion pounds to cover an expected rise in defaults due to the outbreak this week.
RBS reiterated its strategic priorities set out by CEO Alison Rose in February, but said it would wind down Bo, the digital bank only launched last November, as a customer facing brand. The bank said Bo's technology would be merged with another of its digital brands, Mettle. The venture had a sluggish start and failed to impress investors.
RBS said the gloomier economic outlook meant that its loan loss rate would be "meaningfully higher" than previously expected and its risk weighted assets would be higher, but it was still shrinking its under-performing investment bank
NatWest Markets.
The bank said it had provided 1.5 billion pounds of loans under a government-backed coronavirus relief scheme for businesses - the most of any bank - and 190,000 mortgage repayment holidays to struggling customers. RBS remains 62% owned by taxpayers following its 45 billion pound state bailout in the 2008 financial crisis.
RBS Chairman Howard Davies said to investors on the bank's webcast investor meeting on Wednesday that the lender's sharp share price fall since the virus outbreak had made any state stock sales soon unlikely.