Follow that horse

6 August 2010 By George Hay Follow @gfhay

The UK bank’s interim figures contained no nasties, but few happy surprises like those from rival statebacked lender Lloyds earlier this week. Bad debts are falling less quickly than at Lloyds, and RBS isn’t so geared to the recovery in UK retail banking. It could lag for years.

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Royal Bank of Scotland reported operating profit of 1.6 billion pounds in the first half of this year, compared to a loss of 3.4 billion pounds in the first half of 2009.

The UK bank said that secondquarter operating profit before exceptional items rose 22 percent to 869 million pounds from the first quarter.

Excluding gains on the fair value of its own debt, operating profit in the second quarter was 250 million pounds, below the 882 million pounds in the first quarter but above the 2.6 billion pound loss in the second quarter of 2009.

The group's net interest margin rose 11 basis points to 203 basis points relative to the first quarter, and 23 basis points to 197 basis points in the first half relative to the same period in 2009. Total impairments fell from 2.7 billion pounds in the first quarter to 2.5 billion pounds in the second quarter.

The group said it remained in line or ahead of all its targets to wind down its noncore business.

Revenues at GBM, RBS's investment bank, totalled 1.9 billion pounds, down 31 percent from the first quarter, with profit before impairments down 40 percent.

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Royal Bank of Scotland reported operating profit of 1.6 billion pounds in the first half of this year, compared to a loss of 3.4 billion pounds in the first half of 2009.

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