ROYAL Bank of Scotland (RBS) today became the latest of Britain's top high street banks to issue record-breaking half-year results, announcing it had made a pre-tax profit of £4.51 billion.
That was a jump of 23 per cent from the £3.68bn the Edinburgh-based bank made over the same period the year before.
And it comfortably beat City expectations - analysts had envisaged the world's fifth-biggest bank making around £4.35bn.
The g
roup, which was wrapping up the banking sector's interim reporting season, also managed to keep a lid on bad debt. It said the amount it was setting aside to cover bad debt would be £887 million, just five per cent higher than the first half of 2005. That was one of the smaller impairment charge increases from the leading UK banks, and it pales beside the 50 per cent increase announced by Barclays yesterday.
However, on the retail side of the business, bad loan provision jumped by 19 per cent to £680m as more people struggle to cope with paying back unsecured borrowing such as personal loans.
RBS - which owns the likes of NatWest, Churchill and Direct Line in the UK and Charter One Financial and Citizens in the United States, as well as a stake in the Bank of China - said its profit jump had stemmed from strong growth in its corporate markets unit and through tight cost controls. Its ratio of costs to income dipped to 41.9 per cent from 42.2 per cent and it had seen customer growth "in all divisions".
Overall income was up by ten per cent to £13.64bn, with UK revenues up seven per cent to £9.82bn and international revenues increasing by 17 per cent to £3.821bn.
RBS' corporate markets unit delivered a strong performance in the first half, with operating profit up 21 per cent to £2.72bn.
The group's retail banking operations, which includes high street banking, reaped a six per cent increase in operating profit to £1.26bn.
Across the group, average loans and advances to customers were up 17 per cent while the figure for customer deposits showed a 14 per cent increase.
RBS chief executive Sir Fred Goodwin said: "We have always placed great emphasis on organic income growth, operating efficiency and risk management, and these are again visible hallmarks of the group's results.
"When coupled with growing customer numbers, increasing geographic diversity and strong capital discipline, the results demonstrate the strength of our business model for market conditions now, and its sustainability in the future."
RBS also said that it was continuing to make "good progress" in its venture with Bank of China on various areas of business co-operation, including credit cards, wealth management, corporate banking and general insurance.
Mr Goodwin pointed to further growth over the next year, close to long-term trends.
Current analysts' forecasts for the full-year see a profit of £8.95bn.
RBS's contribution took the total half-year profit announced this week by Britain's five biggest banks to £19.32bn - a profit of £1228 for every second of the first six months of 2006.
Earlier this week, HSBC posted profits of £6.71bn, while Barclays made £3.67bn, Lloyds TSB notched £1.78bn and HBoS reported a surplus of £2.65bn.
The full article contains 593 words and appears in Edinburgh Evening News newspaper.
