RBS back in the black

State-owned Royal Bank of Scotland (LON:RBS) returned to the black in spectacular fashion in the first half of the year.

It booked an operating profit of £1.58 billion in the six months to June 30, reversing a loss of  £3.35 billion in the same period last year.

Retail banking income rose as costs fell in the wake of some fairly tough cost

cuts by chief executive Stephen Hester.
The group’s cost to income ratio dropped two percentage points to 55pc as a total of 23,000 jobs have been cut from the payroll since 2008, the majority here in the UK.

At the same time loan impairments have begun to ease.

Hester cautioned there is still a long way to go before the RBS turnaround programme can deemed a total success. He said: "The rebuilding of RBS is a marathon and not a sprint. 
I am pleased with the steady momentum in our core customer-facing businesses.

"However, our path to the sustainable profitability and other improvements we target will not be linear, given the scale of management action in our core businesses, continuing risk reduction in non-core and the impact on both of a changeable economic and regulatory environment."

The exit from certain lines of business included the sale of 318 bank branches earlier this week to Spain’s Santander.

This was forced on the group by European Union regulators when it received a government bail-out.

The taxpayer owns 83 per cent of RBS.