The Royal Bank of Scotland Group has said that its performance in the first half of the year was satisfactory and that the bank is on track for profit growth that replicates the one last year.
The bank issued a statement saying, "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 RBS, which is Britain's second biggest bank, said that the credit arrears had grown, but there was no cause for alarm, as these appear to be "within normal parameters".
Sir Fred Goodwin, the RBS chief executive, said, " The group continues to make good progress and ... the underlying strength of our business performance should be readily apparent when we publish our interim results. What we have been seeing at this point would be closer to more normal levels. There's nothing to make us wish we had not done the business in the first place."
The bank said that the revenue growth from the corporate banking plus its Citizens business in the United States was very healthy, but the group's UK retail business was affected by the general slowdown throughout that country.
David Ridland at Britannic Asset Management, which manages about 14 billion pounds ($25.7 billion) including RBS stock, said, "The message from Royal Bank is that the (consumer) credit environment is in line with their expectations and is offset by continued strength in corporate credit quality."
James Leal, an industry analyst at brokers Teather & Greenwood, said, "This [the trading update] reads better than what we've had so far, particularly from Barclays. It shows the benefits of a diversified group. When you get a slowdown in one part, it can be offset by the rest of the business."
The RBS figures were released even as the Bank of England's monetary policy committee (MPC) began its monthly deliberations on the interest rates. The BoE has been under increasing pressure to lower borrowing costs as the consumers have moved away from unsecured borrowing.
Posted
on : Wed, 08 Jun 2005 16:40 GMT | Banking News
By : Mike Lawson
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