There would be continued negative impact on growth in the near term because of Brexit related uncertainties, warned Royal Bank of Scotland (RBS) as it reported a fall in its profits for the first three months of the current fiscal year.

The bank reported a 12.5 per cent year on year decrease in the profits for the first quarter at £707 million compared to a profit of £707 million in the same quarter in 2018. 62 per cent of RBS is owned by the government.

Its business borrowing decisions could be delayed due to the continued uncertainty in the business environment because of Brexit – which is yet ot be implements, the bank said and added that it “is likely to make income growth more challenging in the near term”.

The bank announced its drop in quarterly profits just a day after the resignation of its chief executive Ross McEwan. He would however continue to hold the post till such time that a his replacement is appointed by the bank.

The leading name that is being talked about to replace McEwan as the chief executive is Alison Rose who was recently given a promotion to take on the role of the deputy chief executive of the bank.

Tougher competition in the mortgage market hit the bank’s profit margins in the first quarter. Its investment bank also performed badly over the period, with income down 41.4% on the previous year.

“This is a solid set of results set against a highly uncertain and competitive backdrop,” said McEwan. “We continue to support our customers through this Brexit uncertainty while investing and innovating in digital services to meet rapidly changing customer needs.”

During the first three months of the current fiscal year, RBS has managed to reduce its expenses by £45 million and it claimed that by the end of the current financial year if the current rate of savings in the bank is able to be continued.

The bank said that almost three fourths of all of the customers holding current accounts with the bank have now shifted to the digital transactions platform and have been using digital transactions on a regular basis. .

Since the time that the bank was granted £45 billion in a bailout program form the government during the height of the financial crisis in November 2008, the government has been holding a majority stake at the bank.

(Adapted from BBC.com)