The Royal Bank of Scotland, the UK’s second largest bank, recorded a rise of 9% in underlying profits to £10.3billion for 2007. The profit showing despite a writedown of £2.5billion related to turmoil in global markets.
RBS faced a £1.6 billion writedown due to its losses in the US mortgage market and a further £900million written off from its recent acquisition of Dutch bank ABN Ambro.
The bank said that the losses contributed to a 2% fall in profits from its global markets and investment banking division to £3.7billion.
Strong results from the RBS wealth management, retail and UK corporate banking divisions helped offset the losses in Global trade markets.
Wealth management profits increased by 30% to £413million, while retail operating profits rose by 10% to £2.5billion.
Sir Fred Goodwin, the chief executive, expressed confidence about the group’s performance during the current year, saying:
“We enter 2008 with real momentum behind our organic growth, and with our product range, distribution capabilities and customer franchises materially enhanced.”
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