RBS profits up 16 percent in 2006

| March 1, 2007

RBS profits up 16 percent in 2006

The latest bank to report its full year results for 2006, Royal Bank of Scotland (LSE: RBS; NYSE: RBS PRM), has said that its pre-tax profits were 16 percent higher than in 2005 at £9.2 billion. Its corporate banking unit saw profits rise by 20 percent to £s5.5 billion. Its UK retail unit, including its NatWest and RBS High Street businesses, saw profits at £2.29 billion, a gain of 2 percent. RBS said that its retail business did well in the UK and Europe and is progressing in its US business.

The bank said that it wrote off bad debt worth £1.34 billion, a gain of 15 percent over 2005, but that losses were lower in the second half of the year than they had been in the first half. It said that credit card debt had stabilized and that defaults on unsecured personal loans are declining. But the problems relating to bad debt meant that only £1 in every £33 in profit growth came from its retail banking unit.

The report from RBS follows recent results announcements from several other major UK banks. HBOS (LSE: HBOS) said on Wednesday that its pre-tax profits were 11 percent higher in 2006 than they had been in 2005. Earlier, Lloyds TSB (LSE: LLOY) said its profits rose by 11 percent last year, while Barclays Bank’s (LSE: BARC; NYSE: BCS; TYO: 8642) pre-tax profits were 35 percent higher than they were in 2005.

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