Royal Bank of Scotland reports £2bn pre-tax profit

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Royal Bank of Scotland Group
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Royal Bank of Scotland made pre-tax profits of £2bn in the three months to 30 September, against a £1.6bn loss in the same period last year.

In a statement, RBS said that its retail operation was "holding up well", but that the investment bank side was "only modestly profitable".

The UK government owns 84% of RBS after having to rescue the bank with a taxpayer-backed bailout in 2008.

RBS said it had cut its exposure to nations such as Greece and Italy.

"RBS's third quarter results show the improved strength and resilience we have built up since 2008," said chief executive Stephen Hester.

"They also highlight the external pressures facing banks, and economies more broadly, which are making the road to recovery longer and bumpier than hoped for," he added.

Retail banking revenues were steady at £4.1bn, but bad debt charges were cut to £1.5bn, down £728m on the previous quarter.

Stock market turbulence saw income at its investment arm, Global Banking and Markets, fall 29% to £1.1bn during the quarter.

The third-quarter profits compare with a £678m loss in the second quarter of 2011. For the first nine months of the year RBS made pre-tax profits of £1.2bn.

The bank has taken more writedowns of £142m on its exposure to heavily-indebted Greece.

RBS said it had cut its holdings of sovereign debt from Portugal, Italy, Ireland, Greece and Spain to £772m at the end of September, from £4bn at the start of the year.

The bulk of these sales were made during the third quarter.

RBS shares have fallen by nearly 50% over the past year.

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