THE Royal Bank of Scotland has repeated its warning of a “material adverse effect” on its business if voters back independence in next month’s referendum.
The bank, which is 80 per cent owned by the taxpayer, highlighted the potential for uncertainty caused by a Yes vote, which it said could significantly impact the group’s credit ratings as well as the fiscal, monetary, legal and regulatory landscape to which the business is subject.
In a section outlining the risk factors facing the group, RBS said in its half-year results that independence could “significantly impact the group’s costs and would have a material adverse effect on the group’s business, financial condition, results of operations and prospects”.
The stark warning from the bank is in line with a statement it made in its annual report earlier this year about the consequences of independence.
The company, which has maintained a neutral position ahead of the vote, has been holding talks with the Bank of England, UK Financial Investments and the Scottish and UK Governments over the referendum.
Half-year results from the bank confirmed figures published last week showing a big jump in operating profits to £2.6 billion. It said it has benefited from the improving economy, reduced bad debts and the quicker run down of non-core assets.
Scottish Government say General Election risk ‘greater’
A Scottish Government spokeswoman said: “This is simply a restatement of the position set out in RBS annual report which they are legally obliged to make and puts the referendum alongside UK interest rates, the housing bubble and ongoing banking reforms as issues they are monitoring. As a recent survey by Deloitte’s highlighted businesses see a far greater risk in the impact of the UK General Election and a referendum on leaving the EU than from anything to do with Scotland’s referendum.
“As Scotland’s Future sets out an independent Scotland will continue to use Sterling as part of formal arrangements that would ensure both currency and regulation remained the same across the UK in the best interests of customers and businesses on both sides of the border.
“Scotland has a strong and diverse economy and the point of independence is to win the powers we need to build on those strengths and create a more prosperous and secure economy – which is good for the financial sector and everyone else.”