Royal Bank of Scotland returns to profit in Q1

Royal Bank of Scotland returned to profit in the first quarter with net earnings of £393 million ($610 million, 467 million euros) after a hefty loss a year earlier, the state-rescued lender said Friday.

RBS said its profit after tax for the January-March period compared with a net loss of £1.545 billion in the first quarter of 2012 -- when the value of the bank's outstanding debt had significantly increased.

"These results show pleasing progress in delivering a strong and valuable RBS for all our stakeholders," the bank's chief executive Stephen Hester said in a statement.

"We expect to substantially complete the bank's restructuring phase during 2014. We are seeing the start of a pick-up in loan demand and have a strong surplus of funds ready and available to fully support economic recovery.

"Across the group we are working hard to improve what we do for customers and to better position the Bank for future growth," he added.

The British government owns 81 percent of RBS after the Edinburgh-based bank was bailed out in the wake of the 2008 global financial crisis with £45.5 billion of taxpayers' cash, making it the world's biggest banking bailout.

Royal Bank of Scotland had been ravaged by its badly-timed consortium takeover of Dutch bank ABN Amro at the top of the market in 2007, just before the crisis struck.