Citizens Financial Group Inc. in Providence, R.I., posted strong earnings growth in the fourth quarter, but not nearly strong enough to offset losses at its parent company.
Royal Bank of Scotland Group PLC said Thursday that it lost 1.8 billion pounds in the fourth quarter, or $2.9 billion, due to continued weakness in its loan portfolio and steep revenue declines in its global banking and capital markets divisions. For the full year, the company, which is now 82%-owned by the British government following its near-collapse in 2008, lost 2 billion pounds ($3.1 billion) compared to a loss of 1.13 billion pounds ($1.8 billion) in 2010. News reports attributed the wider 2011 loss, in part, to hefty loss provisions it took on its exposure to Greek debt.
At its U.S. subsidiary, the $131 billion-asset Citizens, the fourth-quarter operating profit rose 144% from the same period a year earlier, to $249 million, due improved credit quality, falling expenses and gains in both interest and noninterest income. For the full year, earnings increased 63%, to $769 million.
Citizens' return on equity for the quarter was 8%, compared to 3.3% a year earlier. It was the company's best quarterly performance in more than three years. For the full year its ROE was 6.3%, up from 3.6% in 2010.
