Royal Bank of Scotland (RBS) said it will change its name later this year, as it reported that its annual profit almost doubled.
The Edinburgh-based bank, which owns NatWest, Ulster Bank and Coutts, said it would rename itself as NatWest Group.
The lender, which remains 62 per cent-owned by the government, said profit jumped to £3.9bn in 2019, outstripping £1.6bn it made the year before.
New chief executive Alison Rose (pictured) said the bank was at the “start of a new era”, following its state rescue at the height of the financial crisis in 2008, costing taxpayers £45bn.
The name change will be widely seen as an effort to shake off that toxic legacy.
The bank said the move comes about because around 80 per cent of the group’s customers use NatWest. It added the names of individual NatWest and RBS branches would not be changed.
Rose took over from former boss Ross McEwan in November, becoming the first female boss of a major UK High Street bank, with a £1.1m annual salary.
This was the first set of results presented by Rose, who joined the bank more than 25 years ago as a graduate.
Mortgage lending rises
The bank said its jump in profit was driven by higher net lending and deeper cost reductions.
It said it was targeting lending growth of greater than 3 per cent across its retail and commercial units this year.
The bank said its new mortgage lending was £33.3bn in 2019, compared with £30.4bn the year before
RBS added its dividend plan meant the government was in line to receive £1.7bn.
However, it had to set aside an additional £900m in the third quarter of the year for the mis-selling of payment protection insurance (PPI).
The bank said it remained cautious about the year ahead.
Rose said: “UK economic growth remains subdued, compared to its historic trend, and interest rates are likely to be lower for longer. This has an impact on our ability to generate net interest income. Business confidence continues to be affected by the UK’s departure from the EU as our customers await certainty over the future terms of trade.”
She added: “Consumer confidence, on the other hand, continues to be supported by a relatively strong UK employment market and we are seeing good volumes in our mortgage business as a result. We still see opportunities to grow in our key target markets despite some of these challenging trends.”
The bank said it planned to support the creation of 50,000 new business lending by 2023, adding it estimated this would involve supporting half a million people.
Lower returns on equity
It said it would target 60 per cent of these funds towards women, a further 20 per towards ethnic minorities, adding that 75 per cent of its support would be directed to new firms outside London and the South East.
AJ Bell investment director Russ Mould said that RBS’ return on tangible equity target set at 15 per cent in 2009, had now fallen to a range of 9 per cent to 11 per cent by 2021 under Rose.
Mould added: “The overall economic environment is hardly helpful either, as growth remains sluggish and the world heavily indebted so finding new borrowers is not as easy as it sounds. Those consumers or corporations who are not heavy borrowers are not likely to need or want debt, while the most eager borrowers could conceivably be those who already have lots of liabilities and therefore represent a higher risk.”
Shares fell more than 7 per cent in late morning trading.