Royal Bank of Scotland boosted by organic growth

Royal Bank of Scotland boss Fred Goodwin highlighted his company’s organic growth record today after revealing further progress in the year to date.

Goodwin, who has come under pressure from shareholders worried by the number of acquisitions made by RBS in recent years, said figures for the first half of the year showed the “inherent strength” of the bank’s business.

He added: “Organic growth has been a key element of the group’s strategy and a prominent theme in our results over recent years.”

In a trading statement, RBS said interim results due on August 4 were expected to be in line with market expectations. It added that growth in impairment losses – covering bad debts – was expected to be lower than the growth in loans and advances.

Fears that Mr Goodwin may be lining up further major acquisitions have weighed on the company’s share price in recent months, even though the company beat expectations in February with a 21% rise in pre-tax profits to £7.94bn (€11.6bn).

Big cross-border deals have included the £5.8bn (€8.5bn) purchase of Charter One Financial in the United States in 2004.

In addition, RBS led a group of investors in the purchase of a stake in Bank of China – the second largest bank in the Asian country – for $3.1bn (€2.5bn) in August.

However that move appeared to have paid off after a bullish debut by Bank of China on the Hong Kong stock exchange ensured a trebling in the value of the UK bank’s stake.

Shares were off more than 2% today, even though the update was in line with market expectations.