Rates shines at Royal Bank of Scotland

Not since the first three months of 2014, when rates trading brought in £359 million, has the business had such a productive quarter.

The surge in rates revenues, RBS said in its results statement on October 28, helped the group’s corporate and institutional banking division to turn a £30 million operating loss in the third quarter of 2015, excluding the costs of restructuring, litigation and conduct-related issues, into a profit of £184 million this time around.

The profits were roughly double their second-quarter level.

The rates performance continued the theme of the second quarter when rates helped the division post its first underlying quarterly profit in more than a year.

Overall revenues at the division surged 70% from a year ago to £526 million, a rise that the bank said in a statement accompanying the results was “principally driven by rates”.

The performance was also supported by higher currencies trading revenues, which climbed by a third from a year earlier to £128 million while financing revenues more than doubled to £78 million.

RBS said in its results it expected CIB revenues to be “modestly up” over 2016 as a whole from last year’s levels.

The UK bank had revealed plans last February to abandon a standalone investment banking model and to either exit or substantially reduce the unit’s trading operations in central and eastern Europe, the Middle East, Africa, Asia and the US.

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