RBS lifted by strong start

Royal Bank of Scotland put investors on standby for another strong set of results today after seeing “good progress” over the first part of the year.

The group, which achieved underlying profits of £7.15bn (€10.7bn) in 2003, said key features of its performance had been strong income growth, further improvements in efficiency and stable credit levels.

In a trading update covering the half-year to June 30, RBS said that profits were anticipated to be in line with expectations. Analysts are currently forecasting a full-year figure in the region of £7.85bn (€11.7bn).

Chief executive Fred Goodwin said: “Good momentum continues across each of our businesses and we are on track to deliver strong organic growth in income whilst continuing to improve efficiency.”

The improvement was achieved at the same time as RBS sealed a £5.8bn (€8.7bn) deal through its US-based subsidiary Citizens to buy Charter One Financial.

The tie-up, which RBS hopes to complete by the end of the year, will create an operation with “extensive coverage” across adjacent North Eastern and Mid Western states.

At a trading level, Edinburgh-based RBS said that all divisions achieved “good organic growth” although figures from Citizens would be affected by the strength of sterling against the dollar.

RBS said higher business volumes meant an increase in expenses, although the company added that its cost to income ratio had still improved.