RBS pays the price, BNP bounces back

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RBS is still paying the price for its past misconduct. Although the British lender made an operating profit of 1.6 billion pounds, a number of charges and legal costs have pushed it into the red –

RBS pays the price, BNP bounces back

RBS is still paying the price for its past misconduct.

Although the British lender made an operating profit of 1.6 billion pounds, a number of charges and legal costs have pushed it into the red – with a loss of 446 million.

It’s set aside extra cash for a settlement with U.S. regulators over alleged foreign exchange manipulation.

The taxpayer-owned bank was fined last November but a number of looming litigation hurdles continue to hamper its performance.

RBS’s boss is already warning of a tough year ahead as he deals with restructuring.

IG’s market analyst Alastair McCaig.

SOUNDBITE: IG market analyst, Alastair McCaig, saying (English):

“Unfortunately investors in RBS rather have their hands tied as to what they’re able to do with it. Obviously with the excessive government exposure, specifically the UK taxpayer, and the assistance required to maintain this stability while this recovery process takes place means that they could well be involved in this slow recovery for some considerable time.”

Across the Channel, the prospects seem to be looking brighter for BNP Paribas.

France’s top bank posted better-than-expected first-quarter growth.

It cites a long-awaited revival in loan demand thanks to a weaker euro.

Higher revenue at BNP’s corporate and investment bank boosted net income to 1.6 billion euros.

But some are cautious of its apparent turnaround.

SOUNDBITE: IG market analyst, Alastair McCaig, saying (English):

“It will be in the quarters ahead where we’ll see if this is a short term improvement in sentiment or whether this is the turning point as far as the recovery can be concerned. Therefore, BNP Paribas’s reliance on this good figures being maintained in the future arguably is going to be reliant upon the euro zone’s ability to convert optimism into actions.”

Despite the profit rise, BNP’s shares dropped more than 2 percent after the earnings announcement.

Tags : Back, Bounces, price, pays

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