Strong performance by Royal Bank of Scotland
Royal Bank of Scotland (RBS), owner of NatWest, reported an 11% increase in profit, to a record £5.1 billion, in the first half of 2007. The performance was particularly strong as the bank repaid £81 million to customers reclaiming bank charges and also paid out a £125 million bill for this year’s flood damage.
The bank is positive 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 2007 reduced by 2%, to £871 million.
In terms of the UK banking sector overall, the RBS results bring profit recorded by the 8 major High Street banks to just under £22 billion, for the first half of 2007. Full-year figures for the leaders in the UK banking sector are likely to go beyond those of 2006, in which case another record profit of at least £45 billion is likely.
RBS is heading a consortium that is bidding £47.8 billion for the Dutch bank, ABN Amro, consequently the results leave RBS in a strong position to succeed in its bid.