RBS quashes talk of merger with Halifax

GEORGE MATHEWSON, chief executive of the Royal Bank of Scotland, yesterday dismissed mounting talk of a fresh round of consolidation in the banking sector and squashed rumours of a merger with the Halifax.

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.

Start your day with The Independent, sign up for daily news emails
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
Angel Di Maria is shown the red card
Roger Federer after his win over Tomas Berdych
Life and Style
News in briefs: big pants in 'Bridget Jones's Diary'
fashionBig knickers are back
James Milner is set to sign for Liverpool this week despite rival interest from Arsenal
sportReds baulk at Benteke £32.5m release clause
The controversial Motor Neurone Disease Association poster, featuring sufferer Michael Smith, has drawn a series of angry complaints
newsThis one has been criticised for its 'threatening tone'
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Financial Reporting Manager

£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

Recruitment Genius: Payments Operations Assistant

£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

Recruitment Genius: Telephone Debt Negotiator

£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

Guru Careers: Communications Exec / PR Exec

£25 - £30K: Guru Careers: We are seeking a highly-motivated and ambitious Comm...

Day In a Page

On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific
In this the person to restore our trust in the banks?

In this the person to restore our trust in the banks?

Dame Colette Bowe - interview
When do the creative juices dry up?

When do the creative juices dry up?

David Lodge thinks he knows
The 'Cher moment' happening across fashion just now

Fashion's Cher moment

Ageing beauty will always be more classy than all that booty
Thousands of teenage girls enduring debilitating illnesses after routine school cancer vaccination

Health fears over school cancer jab

Shock new Freedom of Information figures show how thousands of girls have suffered serious symptoms after routine HPV injection
Fifa President Sepp Blatter warns his opponents: 'I forgive everyone, but I don't forget'

'I forgive everyone, but I don't forget'

Fifa president Sepp Blatter issues defiant warning to opponents
Extreme summer temperatures will soon cause deaths of up to 1,700 more Britons a year, says government report

Weather warning

Extreme summer temperatures will soon cause deaths of up to 1,700 more Britons a year, says government report
LSD: Speaking to volunteer users of the drug as trials get underway to see if it cures depression and addiction

High hopes for LSD

Meet the volunteer users helping to see if it cures depression and addiction
German soldier who died fighting for UK in Battle of Waterloo should be removed from museum display and given dignified funeral, say historians

Saving Private Brandt

A Belgian museum's display of the skeleton of a soldier killed at Waterloo prompts calls for him to be given a dignified funeral