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RBS returns to profit in first half of 2017

RBS has returned to profit in the first-half of the year, despite a big one-off charge due to a US legal case.

The government still holds a 73% stake in RBS.

Legal costs

Last month, RBS agreed to a £3.65bn settlement for its role in the sale of risky mortgage products in the US before the financial crisis.

The settlement was with the US Federal Housing Finance Agency, and part of the cost of that deal is reflected in the latest results.

A separate deal with the Department of Justice is expected later this year.

The cost of that settlement is likely to help push RBS into a loss for the full-year. Adding to the loss will be costs incurred from boosting its financial reserves and further charges related to reorganising the business.

On the UK economy, Mr McEwan said he saw signs of strength, with net lending growing 4% in the first half of the year.

He said UK retail customers were still spending, but big business customers were being more cautious about making investments.