NatWest Markets made just £2m from its rates business in the third quarter, the bank said on Thursday, helping to push Royal Bank of Scotland’s investment bank back into the red. Some are uncertain over the future of the business.
RBS pointed to elevated hedging costs in rates, driven by reduced liquidity and wider bid-offer spreads at a time of a flattening curve in global markets. This was particularly apparent in August, it said, a month when government bond yields jerked down sharply.
Rates income had been £158m