Royal Bank of Scotland Group plc (NYSE:RBS) (LON:RBS) reported its first quarterly profit since 2011 fueled by declined impairments on sourcing loans.

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For the first quarter, the net income for Britain’s biggest state-owned lender came in at 393 million pounds ($610 million), outperforming the analyst estimates of 317 million pounds. For the same quarter a year ago the company posted a loss of 1.5 billion pounds. The impairment declined 21 percent to around 1 billion pounds, according to the statement released by Royal Bank of Scotland Group plc (NYSE:RBS) (LON:RBS).

According to Stephen Hester, the CEO of the bank the restructuring of the bank will be complete by the next year. Royal Bank of Scotland Group plc (NYSE:RBS) (LON:RBS) was the bank, which received biggest banking bailout in the world during 2008 crisis. The bank has made various efforts in the past to post profit and to come out of control of government, but it has only resulted in losses fueled by other factors including downfall of Irish housing market. The bank was further told to keep more than 2 billion pounds to pay compensation to those clients who were given the payment protection insurance improperly.

“A great bulk of the heavy lifting has been accomplished at this point,” Finance Director Bruce Van Saun said. “We are focused on building the capital position this year.”

Efforts to Save On Costs

The Bank after the arrival of CEO Hester in 2008 has cut significantly on costs improving the balance sheet, and also slashed around 36,000 jobs. The assets in the non-core business segment of the bank were cut down by as much as 4.5 billion pounds in the quarter to 52.9 billion pounds from 258 billion pounds towards the end of 2008. The bank also managed to reduce its operating cost by 3.5 billion pounds to around 4 billion pounds in the quarter of previous fiscal year.

CEO Hester announced in a conference that the bank has cut down the bad assets to a fraction of their original size. He further said the bank will give money to the taxpayers and not borrow any more.

There has been an increasing pressure to bank from the government to sell more assets and increase its capital in order to recover part of its 45.5 billion pound investment. The bank, according to Hester, will also reduce its investment banking business, which is currently running into profit. Royal Bank of Scotland Group plc (NYSE:RBS) (LON:RBS) will further sell its stake in the Citizens Financial Group Inc, acquired in 1988.

The stock of Royal Bank of Scotland Group plc (NYSE:RBS) (LON:RBS) was up 0.2 percent to 307.30 pence in London trading yesterday that is still well below the cut-off of 407 pence at which the government would break even on its investment. This year till yesterday, stock is down 5 percent, which is the worst performance by a Brit bank.

Royal Bank of Scotland’s Q1 at glance:

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