Royal Bank of Scotland yesterday concluded a week which has seen a much more solid-looking batch of results from the sector.

RBS’s results were the worst of the crop, but this is probably because it had the deepest hole from which to climb.

Notwithstanding the relative weakness of its update, RBS did manage to record a net profit attributable to shareholders of £257 million for the second quarter.

This more than offset a £248m loss for the opening three months of this year, and meant the 83% taxpayer-owned RBS slightly more than broke even at the bottom line for the first half.

RBS’s rebound has been aided by a £45 billion injection from the state.

The taxpayer should be interested in ensuring that there is no loss on this stake, especially in this grim age of austerity being brought in by the Conservative-Liberal Democrat Coalition Government at Westminster.

RBS’s shares dipped 1.7% after its results but this followed a sharp run-up in recent weeks. The taxpayer, meanwhile, remained modestly in the black on the RBS investment. RBS shares closed at 51.1p, against a taxpayer break-even price of 50.2p.

There is, however, a long way to go. The massive public spending cuts ahead pose a huge risk to the UK economy, and the banks will be hit hard again on the bad-debt front if a renewed recession results.

Hopefully, there will be no double-dip, but it is undoubtedly a danger.

The same reasoning applies to the bailed-out Lloyds Banking Group, which is 41% owned by the taxpayer.

Unfortunately, RBS’s return to profitability will not bring an end to the job fears misery of thousands of its staff who are still waiting to see where the remainder of its swingeing cost-cutting programme will hit.

Nor will it bring back the jobs of those who have already been shown the door.

http://www.heraldscotland.com/business/a...-1.1046543