RBS figures expected to stay in red

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Royal Bank of Scotland is expected to remain in the red when full-year figures are revealed

Royal Bank of Scotland is expected to remain in the red when the part-nationalised player reveals full-year figures on Thursday.

Annual results from RBS will be pored over for clues as to when the Government may start offloading its 83% stake, taken in return for bailout cash at the height of the financial crisis.

Most analysts are pencilling in 2010 losses of £700 million against a £3.6 billion loss in 2009, helped by lower levels of bad debts.

Investec Securities experts believe bad debt improvements helped the bank claw its way out of the red in the fourth quarter, forecasting net attributable profits of £482 million in the final three months.

The bank’s controversial bonus plans have already been revealed, announced at the time of the Project Merlin deal with Chancellor George Osborne.

Chief executive Stephen Hester has been awarded a £2.04 million bonus, but will only take the handout in shares deferred for three years and will not receive a pay rise this year.

Its investment bankers will share a bonus pool of under £950 million, lower than the £1.3 billion in 2009, and will have upfront cash payments limited to £2,000. With bonus details out of the way, the attention will settle on its figures.

Sharply lower bad debt losses are largely expected to be behind the expected improvement, although RBS is predicted to reveal a hit from the economic woes in Ireland given its exposure through the Ulster Bank subsidiary.

Confirmation of a return to profit in the most recent quarter would reinforce speculation over Government plans to start offloading its shareholding.

RBS shares have also gained ground in recent weeks, thanks to rumours of an early exit from the Government’s toxic asset protection scheme and news of a 32% surge in profits at rival Barclays. The stock has risen 20% in the past three months to just over 48p – but this is still below the 50.5p break-even point for the Government.

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