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Coutts profits double as jobs go in big squeeze on costs

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Coutts profits double as jobs go in big squeeze on costs

RBS-owned Coutts and Adam & Company's profits more than doubled last year as the company cut headcount sharply in a squeeze on costs.

The high street giant's private banking division last October reported a 9.6% fall in staff numbers, as it offset higher compliance costs. 

Figures for 2018 show profits topped £303 million, 112% higher than 2017, on higher income, lower impairments and lower strategic costs, with outgoings reduced by £66 million, or 12.1%.

A higher regulatory burden, turbulent markets and the increasing importance of the latest and most efficient tech have all served to spotlight staffing costs

Brooks Macdonald in particular has announced a targeted programme of redundancies in its IT and administrative teams.

Assets under management across RBS' private banking division fell 5.7% to £26.5 billion, with plunging markets only partially offset by new business.

Coutts chief executive Peter Flavel (pictured) said: 'Our business has undergone substantial change over the past three years, not all of it has been easy; but when I look back and reflect at this very strong performance, I am incredibly proud of Coutts, and our people.

'I am most proud of our people in delivering these outstanding results. Of course there is much more yet for us to achieve and improve. We look forward to carrying this momentum forward as we strive to achieve our aim of becoming the best private bank in the UK.'

Flavel argued that the figures show the firm is ahead of schedule.

He said: 'Additionally we continue to welcome a new generation of younger clients many of whom are accumulating wealth through quite different ways through the 4th industrial revolution.

'We implemented a new strategy, a new operating model, and today’s results illustrate robust execution against it – in three years we have achieved most of what we originally set out to do in five years.'

At a group level, the bank, which is 62% owned by the taxpayer, reported a pretax profit of £1.6 billion in 2018, a big jump on the £752 million it returned in the previous year.

The bank accompanied this with news it intends to pay a special dividend on top of its ordinary payout, meaning the Treasury's coffers will be boosted by £977 million. 

The total payment of 13p per share is 60% higher than forecasts. 

The government took a stake in RBS at the height of the credit crisis in 2008. It sold a 7.7% stake in the bank last June and aims to dispose of the remainder by 2023. 

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