The first set of results under new CEO Ross McEwan have been posted for the period to end of Q3, 2013.
Any new CEO is going to look at the state of the business and get the bad news out early and the announcement of a pre-tax loss at a little over £600m vs market expectations of a modest profit chimes with this view.
Key highlights were:
RBS announces actions to accelerate capital strengthening and enhance strategic focus;
Full review of bank to improve customer service reporting February 2014;
Q3 2013 pre-tax loss £634 million, after £496 million accounting charge for improved own credit;
Core Tier 1 ratio up to 11.6%, or 9.1% on a fully loaded Basel III basis.
The biggest news though was the announcement of an internal bad bank to deal more swiftly with non-core assets as the bank seeks to reorient as a UK focused commercial and retail bank.
It's not clear quite what the construct of an internal bad bank will be but the idea is to accelerate the programme of disposals of poor quality assets over the next three years. The plan is to move up to 70% off the books, taking more pain earlier. If some kind of legal separation can be achieved it's just possible this could lead to a reassessment of the dividend policy and commencement of repaying the government stake.
At present a move back into the private sector looks along way off, but ultimately will be the best tonic for the bank in the long term.
The real news in these results is the avoidance of a forced break up of the bank which would have been incredibly distracting and resource hungry and would almost certainly have needed more State support.