RBOS on track to maintain profit growth

Ulster Bank’s parent company, Royal Bank of Scotland, is on track for profit growth similar to a year earlier, it said today …

Ulster Bank’s parent company, Royal Bank of Scotland, is on track for profit growth similar to a year earlier, it said today in a trading statement.

Revenue growth from corporate banking and the Citizens US business are strong but growth at the bank's UK retail business has slowed as consumers have moved away from unsecured borrowing, the bank said.

"Strong overall income growth, coupled with our cost:income ratio and stable credit quality, is expected to produce underlying growth in profit before tax broadly consistent with that reported for the comparable period last year," the bank said in a statement.

Operating profit rose 12 per cent in the first half of 2004. UK retail provisions for bad debts have increased, due to credit card arrears, though these are "within normal parameters", the bank added.

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RBS is the latest UK bank to update investors ahead of first-half results. Britain's lenders were buoyed last year by a consumer boom and investors are watching for weakening revenue growth and bad debt rises after Barclays said last month that provisions were rising ahead of its expectations.

RBS shares closed up 1 percent at 1,637 pence on Tuesday. The stock has fallen 6.6 per cent so far this year, making it the second-worst performer of the eight banks in the FTSE 100 index. The bank is due to report first-half results on August 4th.