SENIOR leaders of Royal Bank of Scotland have expressed frustration over the Brexit deadlock as the institution reported its second annual profit since being bailed out by taxpayers a decade ago.

The bank, which remains 62.4 per cent owned by UK taxpayers, is finalising plans which will allow it to continue to serve customers within the European Union (EU) after Brexit.

With still no sign of a breakthrough at Westminster on the terms of the UK’s withdrawal from the EU, Royal Bank said it was on course to launch subsidiaries in Amsterdam and Frankfurt in April. Chairman Sir Howard Davies told reporters that the operations will allow the bank to continue to serve large corporate and financial customers in western Europe, and to continue clear Euro payments.

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However, in what could be viewed as a direct riposte to Prime Minister Theresa May, who this week urged MPs to hold their nerve as the Brexit date of March 29 nears, Sir Howard declared: “Practical preparations rather than nerve are what we need now.”

He added: “We are now getting to the point where we have to put those things into operation, because now it is far too late to just make contingency plans. You have to get people in place.

“Those things will happen whatever the outcome, because the process has now gone on too long for us to sit and wait.”

Royal Bank posted a profit attributable to shareholders of £1.6 billion for the year ended December 31.

It was more than double the £752 million it reported in 2017, which marked its return to the black for the first time since its £45bn bailout during the financial crisis.

However, mulling the outlook for 2019, the bank warned that “ongoing political uncertainties and geopolitical tensions could affect our credit loss income”, adding that impairments are expected to increase this year.

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Having made a £100m provision for Brexit uncertainty in October, the bank made no further provisions for potential impairments as a result of the UK’s divorce from the EU yesterday. But Mr McEwan expressed his frustration over the continuing political impasse.

He said: “I don’t think I’m alone in saying that the political uncertainty has gone on far too long. Our corporate clients are pausing before making financial decisions, and this of course is damaging the UK economy and will affect our income performance.”

Mr McEwan added: “It is clear that the economy is cooling off. The Bank of England cooled [its projection of] GDP growth from 1.7% to 1.2%, which will start to be felt, and we are starting to feel it. That is why we are calling it out [that] there might be some impact to our income over 2019 and 2020.”

The bank yesterday rewarded long-term investors for their patience with a pledge to return further capital to shareholders. It proposed a final ordinary dividend of 3.5p per share plus a special dividend of 7.5p per share, with Mr McEwan noting that it will mean it return a total of £1.6 billion in dividends to shareholders for 2018. This will include £1bn to UK taxpayers.

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After the pay-outs were taken into account, the bank said it ended the year with a strong capital position, with a common equity tier one (CET1) ratio of 16.2 per cent compared with 8.6% in 2016. The bank is targeting a 14% CET1 ratio by 2021, which will take into account the purchase of any shares it may acquire from the Treasury under the directed buyback it won approval from investors to pursue last week.

Sir Howard said the bank was now in a position to look at its capital position “more sensibly in a normal way”, having reached a settlement, worth nearly $5bn, with the US Department of Justice last year over its role in the sale of residential mortgage-backed securities before the financial crisis.

Responding to a question about branch closures, Mr McEwan said the bank had no plans to shut any more in 2019 or 2020. Last year it swung the axe on 62 branches in Scotland, around one-third of its total, leading to a political outcry. The branches in Biggar and Barra survived after a review. Mr McEwan said: “There will be no more in 2019, and we have no plans for 2020. Branch closures is all about who is using them.

It is like any resource or business. If people don’t use that resource, we have to change the way we operate.”

However, Mr McEwan conceded the lender must do more to improve its customer service after just 47% of customers said they would recommend their personal account provider to family and friends. The score, in a survey commissioned by the Competition and Markets Authority, ranked Royal Bank in a lowly16th place in the table of major UK banks.

Mr McEwan said: “While our financial performance is more assured, we are aware that there is a significant gap to achieve our position to be the best bank for UK customers. We must do better.”

Meanwhile, the bank’s latest annual report showed that Mr McEwan received a remuneration package worth £3.6 million in 2018, up from £3.5m the year before. The 2018 package included a salary of £1m, a fixed share allowance worth £1m and £1.1m under the bank’s long-term incentive plan (LTIP).

Shares in Royal Bank closed up 2.4% at 247.5p.