THE leaders of troubled Royal Bank of Scotland could be forgiven for feeling a little envy as they look at how things are panning out at fellow high street lender Lloyds.
Both banks required hefty Government bailouts to shore up their battered balance sheets at the height of the financial crisis.
But while there is still no sign of taxpayers getting back the £45 billion the Government pumped in to keep Royal afloat, Lloyds broke free of public hands last May. It is paying dividends again and, as announced yesterday, is now planning to return £1 billion to shareholders via a share buyback programme. The contrast between the banks could scarcely be starker, especially in a week when Royal’s image has taken a further pounding thanks to yet more damaging revelations about the activities of its Global Restructuring Group.
Granted, Lloyds has not broken fully free of the past. While profits for 2017 were up 24 per cent at £5.3bn, they came in short of analysts’ expectations, mainly because the bank set aside a further £600 million for PPI compensation claims.
The legacy of PPI mis-selling is expected be a drag on Lloyds until the final deadline for claims passes in August 2019. But there can be no doubt momentum would appear to be with the bank.
It is a position which, for the time being at least, Royal Bank can only dream about.
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