RBS delays Williams & Glyn sale as Q1 sees £1bn losses

The Edinburgh-based lender, which is still 73 per cent state-owned, stressed that if the £1.2bn figure is removed, then RBS made a pre-tax profit of £421m, up from £37m in Q1 2015.

However, the bank also announced it is delaying plans to sell Williams & Glyn, a process which is expected to cost the business upwards of £1 billion in itself imposed as a condition of its bailout according to EU rules.

RBS said that spinning off Williams & Glyn was taking longer than expected.

Continuing efforts to restructure the business - including the Williams & Glyn separation – have already cost the bank £238m.

A statement issued with the results said: “Since the last update provided with the 2015 Annual Results, we have undertaken further extensive analysis on the separation and divestment of Williams & Glyn.

“As a result of this analysis, we have concluded that there is a significant risk that the separation and divestment to which we are committed will not be achieved by 31 December 2017.”

RBS said that building a separate IT platform for the sell-off is “challenging” and it is trying to find other ways to separate and sell Williams & Glyn.

The bank added: “The overall financial impact on RBS is now likely to be significantly greater than previously estimated.”

RBS said its personal and consumer banking lending grew by 15 per cent in Q1, “with strong growth in both the mortgage and commercial businesses” and there had been strong growth in both its mortgage and commercial businesses in the quarter.

However, challenging market conditions that have affected traders across the banking sector were a drag on revenues.

There were also sales of assets, such as Coutts private bank subsidiaries in Asia, the Middle East and Russia, that brought in less than had been expected.