03/05/2013 04:30 BST

RBS Profits Posted As Taxpayer-Owned Bank Prepares To Privatise

Taxpayer-backed Royal Bank of Scotland said the government should be able to start selling off its stake within a year as the bank reported its best quarterly profit since 2011.

In the clearest signal yet of a timetable for the bank's return to the private sector, chairman Sir Philip Hampton said the recovery would be "substantially complete" by the middle of 2014 and that RBS would begin preparing a prospectus with the Treasury to sell to investors.

First quarter figures confirmed the bank's turnaround efforts were paying off as it swung out of the red with pre-tax profits of £826 million - its best performance since the third quarter of 2011.

Chief executive Stephen Hester said the clean-up at RBS will be largely complete within a year, meaning it could be privatised.

He said work to fix the banking giant would be "substantially complete", allowing RBS to look "much more like a normal bank which can serve the economy and customers properly".

He said the bank had posted profits of £826 million and while there would be "bumps in the road" the company could operate as needed by itself.

Mr Hester said: "The clean up of RBS can be accomplished under our own steam in the next year, year and a half. I think we will be substantially done next year.

"Obviously, it's not my job to decide how public money is spent, I think most people believe enough public money has been spent on RBS and are looking forward to getting it back.

"So we can deliver an RBS that can do its job and is cleaned up in the not- too- distant future. The other debates are for Government, Government sets how to spend its money."

Mr Hester said he was "open" to suggestions such as splitting the bank to remove bad assets.

"I think the critique would be the use of taxpayer money in large amounts and the time it would take," he said.

"The extent to which there are advantages are in the eye of the beholder."