RBS records record profit

by Gill Montia

Story link: RBS records record profit

Royal Bank of Scotland (RBS), owner of NatWest, recorded an 11% increase in profit, to a record £5.1 billion, in the six months to the end of June 2007.

The performance was particularly strong given that the bank repaid £81million to customers reclaiming bank charges, whilst also footing a £125 million bill for this year’s flood damage.

The bank is confident that its corporate loan book remains strong and that it had ridden out the worst of the bad debts from the UK unsecured personal credit market.

In this respect, the amount written-off by RBS across all its bad debts in the first-half of the year decreased by 2%, to £871 million.

The results leave RBS well placed to succeed in its bid for ABN Amro, the Dutch bank.
The bank is heading a consortium that is bidding £47.8bn for ABN and if successful, RBS will acquire most of ABN’s global banking and markets businesses.

These are two areas of business where RBS is showing strong growth, with total profit increasing 16%, to £3.15 billion, during the first-half of 2007.

In terms of the overall UK banking sector, the RBS results bring profit recorded by the eight major High Street banks to just under £22 billion, for the first six months of the year.

Full-year figures for the leaders in the UK banking sector are likely to exceed those of 2006, in which case another record profit of at least £45 billion can be expected.