The Royal Bank of Scotland Group Plc - Q1 Interim Management Statement

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Q1 2019 attributable profit of £707 million compared with £808 million in Q1 2018.

 

Supporting our customers:

 

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We continue to support our customers through ongoing UK economic uncertainty. UK Personal Banking (UK PB) gross new mortgage lending was £7.6 billion in the quarter, with net loans to customers of £150.6 billion at Q1 2019. Commercial Banking originated or refinanced £4.6 billion of utilised term lending in the quarter and net loans to customers were £100.8 billion.

 

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Across UK PB, Ulster, Commercial and Private Banking net loans to customers increased by 0.8% on an annualised basis.

 

Income stable in a competitive market:

 

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Excluding notable items, NatWest Markets (NWM) and Central items, income remained stable compared with Q1 2018.

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Across the retail and commercial businesses, net interest margin (NIM) of 2.07% was stable on Q4 2018. Group NIM decreased by 6 basis points to 1.89% reflecting a reclassification of funding costs in NWM and an IFRS 9 accounting change for interest in suspense recoveries.

 

Building a sustainable bank through continued transformation and increased digitisation:

 

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We remain on track to meet our £300 million cost reduction target this year, achieving a £45 million reduction in the quarter.

 

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We now have 6.6 million regular personal and business users of our mobile app. In UK PB, 73% of our active current account customers are regular digital users and total digital sales increased by 17%, representing 47% of all sales in Q1 2019. In Commercial Banking, we now have over 2,500 users of the Bankline Mobile app, up 19% compared with Q4 2018.

 

Capital generation:

 

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CET1 ratio of 16.2%, which excluding the impact of IFRS 16 'Leases' and a 2p dividend accrual, represents an underlying increase of 30 basis points in the quarter.

 

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RWAs increased by £2.1 billion compared with Q4 2018 principally reflecting a £1.3 billion increase associated with IFRS 16 'Leases'.

 

Outlook(1)

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.