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RBS sees profits rise to £9.2bn | RBS sees profits rise to £9.2bn |
(10 minutes later) | |
The Royal Bank of Scotland (RBS) has reported a pre-tax profit of £9.2bn for 2006 - 16% up on the previous year. | The Royal Bank of Scotland (RBS) has reported a pre-tax profit of £9.2bn for 2006 - 16% up on the previous year. |
RBS, which also owns both NatWest and Churchill Insurance, is the UK's second-largest banking group. | RBS, which also owns both NatWest and Churchill Insurance, is the UK's second-largest banking group. |
The bank said its retail arm had done well in the UK and Europe with moves into the US also progressing. | The bank said its retail arm had done well in the UK and Europe with moves into the US also progressing. |
Like other UK banks who have reported large profit rises, RBS said much of its gains had come from its investment and corporate banking division. | Like other UK banks who have reported large profit rises, RBS said much of its gains had come from its investment and corporate banking division. |
It added that 42% of its operating profit came from outside the UK. | It added that 42% of its operating profit came from outside the UK. |
Criticism | Criticism |
One of the strongest performances came in corporate banking, with profits up 20% to £5.55bn. | One of the strongest performances came in corporate banking, with profits up 20% to £5.55bn. |
The UK retail division, which includes its NatWest and RBS High Street businesses, saw profits rise 2% to £2.29bn. | The UK retail division, which includes its NatWest and RBS High Street businesses, saw profits rise 2% to £2.29bn. |
But amid criticism of the UK banking sector for charging unreasonable fees and penalty charges, RBS said that only £1 in every £33 of its profit growth was made in retail banking. | But amid criticism of the UK banking sector for charging unreasonable fees and penalty charges, RBS said that only £1 in every £33 of its profit growth was made in retail banking. |
The amount of bad debt the banking group wrote off rose 15% to £1.34bn, with losses lower in the second half. | The amount of bad debt the banking group wrote off rose 15% to £1.34bn, with losses lower in the second half. |
Credit card debts had stabilised and the growth in arrears on unsecured personal loans was slowing, it added. | Credit card debts had stabilised and the growth in arrears on unsecured personal loans was slowing, it added. |
RBS is the latest major UK bank to report a strong rise in profits for 2006. | RBS is the latest major UK bank to report a strong rise in profits for 2006. |
On Wednesday, HBOS, the bank formed by a merger of Halifax and Bank of Scotland, reported a 19% rise in annual pre-tax profit to £5.71bn. | On Wednesday, HBOS, the bank formed by a merger of Halifax and Bank of Scotland, reported a 19% rise in annual pre-tax profit to £5.71bn. |
Barclays announced a 35% rise in pre-tax profits to £7.14bn for 2006, while Lloyds TSB's profits were up 11% to £4.25bn. | Barclays announced a 35% rise in pre-tax profits to £7.14bn for 2006, while Lloyds TSB's profits were up 11% to £4.25bn. |
"With these numbers, RBS has made its own contribution to what has so far been a mostly glittering performance from the banks," said head of UK Equities at Hargreaves Lansdown Stockbrokers, Richard Hunter. |
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