RBS' DOJ subprime settlement was below estimates (of around $11billion): at $4.9 billion, that's 70% covered by provisions.

"The pro forma impact on RBS's 31 March 2018 Common Equity Tier 1 ratio ("CET1") is a reduction of approximately 50 basis points and a reduction of 9p on 31 March 2018 fully diluted TNAV per share"

RBS will be 300bps above CET1 target this year at around 16%.

By 2020, CET1 target is >13%. From this and a CIR <50% (continued benefits of automation/technology, branch transformation), ROTE is targeted at 12%.

If all goes according to plan with DOJ, market attention will shift to the sale of the government stake and dividend and buyback policy. There are the Stress Tests too but being a reformed student, RBS should sail through them.

With pension (£7.7bn over last 2 years) and litigation exposures sharply reduced (remains some residual FX, Libor and Treasuries issues with PPI reserves at adequate levels) and NatWest Markets (13% of Income) under restructuring, there will be other matters for the market to focus on. Ulster Bank (4% of Income) still represents > a third of impaired loans.