Overall, the share price responded positively to the news on the day, trading as high as 4% earlier on, before settling 1.78% higher at 257.7p.
The bank was also able to lower its cost to income ratio down to 76.1%, though, analysts note this is still high relative to peers.
It did not announce any additional provisions for the mis-selling of PPI, “but the biggest worry for investors will be the looming fines related to US mortgage mis-selling scandal for which the costs could be in the billions,” according to Helal Miah, investment research analyst at The Share Centre.
“We feel that RBS is still a long way off from being ‘investable’ and therefore continue with our ‘sell’ recommendation,” he said.
Barclays is not at the top of The Share Centre’s ‘recommendation’ list either. Instead, the group likes the prospects of FTSE 100 peers Lloyds and HSBC.
“The banking industry continues to face many challenges and risks associated with the industry remain at elevated levels. Lloyds is heading in the right direction as it improves its dividend pay-outs and profitability,” Miah said.
“For the time being though we are most confident to recommend HSBC as our preferred bank given its emerging market and global exposure with the strongest balance sheet amongst UK listed banks and currently offering a compelling income return.
“For investors wanting to take a different approach, then some of the challenger banks may be worth taking a look at,” he added.
“These are fast growing banks, offering improved customer experiences and taking customers away from the big four. Amongst these, we have recently placed Virgin Money onto our recommended list.”
