Royal Bank of Scotland almost doubled its annual profit, declared a special dividend and said it would change its name to NatWest, as new chief executive Alison Rose moves to put her stamp on the lender. The company, however, also warned that an uncertain market environment would put downward pressure on its income. Net profit for the year through December rose to £3.13bn, up from £1.62bn on-year. Pre-tax operating profit rose 26% to £4.23bn, even as the bank's net interest margin contracted to 1.99%, back from 2.09%. RBS declared a final dividend of 3p per share plus a special dividend of 5p per share. The bank said that 'in a challenging market' it had exceeded all of its most recent 2019 financial targets, including for cost cutting and lending growth. On its outlook, RBS said it expected 'challenges on income' due to ongoing market uncertainty. Regulatory changes were also expected to sap income in the company's personal banking business to the tune of around £200m. RBS also said it expected to incur £0.8bn-to-£1.0bn of strategic costs during 2020, resulting from moves by Rose to shrink its investment bank NatWest Markets, and a continued resizing of its cost base. The bank was targeting lending growth of greater than 3% across its retail and commercial franchises. As for its medium-term outlook, RBS said it expected to achieve a return on tangible equity of 9-11% 'in the medium to long term' accompanied by 'operating cost take-out'.
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