RBS quashes talk of merger with Halifax
Friday 04 December 1998
He said prospects for further banking mergers were receding because of high valuations and new accounting rules on the treatment of goodwill.
"The new rules are very negative for banks taking over other banks. So I don't see much prospect for consolidation in the sector in the coming year," he said.
Asked about the Halifax, Mr Mathewson added: "Halifax is a legacy business - it is what it has been rather than what it is going to be. It does not fit very well with what we do. We are a fast-moving, innovative business with a range of different businesses and if we merged with them, where would the growth come from?"
But Mr Mathewson said the bank still had an appetite for other acquisitions outside the sector, including UK building societies "at the right price".
Shares in RBS leapt 7 per cent yesterday as the bank reported full-year profits up 32 per cent to pounds 1.001bn, well above forecasts. The shares closed up 62p at 932p, valuing the group at pounds 7.67bn. Profits at the main UK retail bank rose by 15 per cent to pounds 780m as it boosted its volume of loans and stabilised lending margins.
Analysts were impressed by a turnaround at Direct Line, the wholly-owned insurer which suffered a slump three years ago as other insurers began to copy its methods. Helped by hardening motor insurance premiums, profits at Direct Line rose 78 per cent to pounds 64m.
Asian difficulties forced the bank to set aside pounds 146m to cover bad debts in Indonesia. Provision for other bad debts increased by 26 per cent to cover extra risks associated with its credit card businesses.
New retail ventures, including partnerships with Tesco and Virgin, made a loss of pounds 52m due to start-up costs. This was offset by the sale of part of a stake in Banco Santander, the Spanish bank, for pounds 57m. Its US subsidiary, Citizens, saw profits rise by 31 per cent to pounds 247m.
- 1 Man on naked bike ride gets ejected after becoming aroused
- 2 Charles Kennedy dead: Former Lib Dem leader dies at home aged 55 - latest news
- 3 Ayyan Ali: Pakistan's top model now appears in the courtroom rather than on the catwalk
- 4 Fifa corruption: Europe plots to stage an 'alternative World Cup' in place of Russia 2018
- 5 Jaden Smith wears gender fluid dress to high school prom with Hunger Games actress
Photographer who performed naked shoot in China's Forbidden City sparks outrage
Ed Miliband returns to the backbenches but it's all a bit awkward as he tries to avoid eye-contact with fellow Labour MPs
Man on naked bike ride gets ejected after becoming aroused
Charles Kennedy dead: Former Lib Dem leader dies at home aged 55 - latest news
Isis tortures 14-year-old Syrian boy and films it in graphic video for 'propaganda purposes'
Migrants in Kos: Photos show real tragedy after Brits abroad complain of 'awkward' holidays
Thousands of teenage girls enduring debilitating illnesses after routine school cancer vaccination
British tourists complain that impoverished boat migrants are making holidays 'awkward' in Kos
Michael Gove determined to scrap the Human Rights Act – even if Scotland retains it
Threat to scrap Human Rights Act could see UK follow Nazi example, warns UN official
Why this year's general election was the most unfair in Britain's history
iJobs Money & Business
£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...
£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...
£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...
£25 - £30K: Guru Careers: We are seeking a highly-motivated and ambitious Comm...