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RBS 'to pay off emergency loans'
Royal Bank of Scotland is expected to announce plans to fully repay its 163 billion pounds of emergency loans
Royal Bank of Scotland is expected to take another step on the road to recovery on Friday when it announces plans to fully repay its £163 billion of emergency loans.
The taxpayer-backed bank will say that by the end of next week it will have repaid all the loans it took from the US and UK Governments at the height of the financial crisis, the BBC reported.
The announcement, which will be part of its first quarter results, comes after a similar step from Lloyds, which recently said it will have repaid all of its £157 billion of loans by the end of the year.
Despite RBS passing the significant milestone, the Government will still own 82% of shares in the bank after its £45.5 billion bailout.
Its loans included £75 billion from the credit guarantee scheme and the Bank of England's special liquidity scheme, £36.6 billion in emergency liquidity assistance from the Bank of England, and some £52 billion from the US Federal Reserve.
RBS, along with hundreds of banks across Europe, is still receiving some central bank support via the 10 billion euro of cheap three-year loans from the European Central Bank's long-term refinancing operation (LTRO). But this has been seen by the City as an opportunity to raise cheap funding rather than necessary financial support.
RBS is also understood to have paid the UK Treasury about £1.5 billion in fees for the credit guarantee scheme, meaning the taxpayer has seen some return on its money.
While the worst may be over for the part-nationalised banks, RBS chief executive Stephen Hester recently warned there is still plenty of hard work ahead, including two years of "heavy lifting, significant clean-up costs and vulnerability to outside events".
RBS, which owns NatWest, is expected to report that retail bank profits will be around 3% lower than the previous quarter at £449 million. However, Mr Hester is expected to report that RBS has been making progress in scaling back the business, particularly its investment banking arm.
As a result, overall losses are set to narrow in the first quarter to £348 million, from £1.8 billion the previous quarter and £528 million a year ago.