RBS posts rare £1.6B first-quarter profit; shares rocket 11%

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Part-nationalized Royal Bank of Scotland (RBS) trebled its first-quarter profit, boosted by cost-control and waning impairment charges.

The bank, which is 82 percent owned by the U.K. government, posted pre-tax profit of £1.6 billion ($2.7 billion) for the first three months of 2014, up from £826 million in the same period a year before.

Shares of RBS rocketed over 11 percent on the news, leading the U.K. FTSE 100.

"Today's results show that in steady state, RBS will be a bank that does a great job for customers while delivering good returns for our shareholders," said Chief Executive Ross McEwan in the bank's earnings report, published on Thursday.

"We still have a lot of work to do and plenty of issues from the past to reckon with. Everyone at RBS is focused squarely on doing everything we can to earn the trust of our customers and in the process change the banking sector for the benefit of the UK," he added.

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RBS posted a pre-tax loss of £8.2 billion ($13.8 billion) in 2013, hit by restricting costs and misconduct charges. This follows its £46 billion bailout by the government in 2008.

The bank's actions continue to be closely monitored by the U.K government, which last week blocked its plans to pay staff bonuses twice the size of their fixed salaries.

Also this month, RBS announced it had agreed to pay £1.5 billion to the Treasury to cancel its priority right to dividends. This removes one bar to the bank's eventual re-privatization.

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