Strong growth at Ulster Bank

Ulster Bank has continued to perform strongly for its parent, Royal Bank of Scotland (RBOS), in the first half of the year.

In a trading statement released yesterday, the Scottish bank said that it expected its interim results to be in line with expectations.

The bank's results will be released on August 4th.

Good income growth, tight cost control and a small improvement in credit performance, as impairment losses grew more slowly than loans, would be the key factors behind the good performance, RBOS said.

It pointed in particular to a good performance from its Irish operations, which include First Active as part of the Ulster Bank group.

"The group has continued to achieve good growth in income, with strong performances in corporate markets, particularly global banking and markets, and Ulster Bank," it added.

However, the group's net interest margin is expected to be lower, partly as a result of changes in its product mix.

Despite the positive trading statement, shares in RBOS, Britain's second-largest bank, lost nearly 3 per cent yesterday, hit by the general downturn in European markets.

The bank unveiled a £1 billion (€1.46 billion) share buyback programme in February and a 25 per cent dividend hike.

It also said it expected its Tier 1 capital ratio - the core capital that all banks are required to have under international banking standards - to be around 7.5 per cent at the end of June.