RBS, over 70 per cent owned by the taxpayer after its £45billion bailout in 2008, swung to a £939million profit from a £2billion deficit last time, although it is still unlikely to avoid a 10th straight annual loss.
McEwan, pictured, said the core business is performing “very well”, even though the average £1billion-plus operating profit it has been generating for the last 10 quarters has been “whittled away” through restructuring and litigation.
Over the past few weeks RBS has agreed a £4.2billion fine with US regulators to settle a claim it mis-sold toxic mortgage bonds, reached a settlement with thousands of shareholders who claimed they were misled into buying its shares before the bailout and looks to have won European Commission approval for a package of measures to satisfy state-aid rules.
One major outstanding obstacle is a potential multi-billion dollar payout relating to a US Department of Justice probe.
McEwan said RBS had to clear the state-aid hurdle and satisfy regulators that it can make money consistently before resuming dividend payouts.
Nor would he predict when the Government might reduce its stake.
But he said: “Our path to sustainable profitability is becoming clearer and closer and we have resolved some of the most significant issues this bank faced.
“It feels much more like this business is seeing light at the end of the tunnel and there is only one train coming towards us.”
Restructuring costs were £790million and McEwan said more jobs would go as it scales back its branch presence with the shift to mobile banking.
Litigation and conduct costs came to £396million and McEwan said RBS is being investigated by the Financial Conduct Authority for potential breaches of money-laundering rules.
It is also making Brexit contingency plans to use Amsterdam as an EU base with 150 staff – it already holds a banking licence in the Netherlands – at a cost of “tens of millions of pounds”.