Royal Bank of Scotland profits up 23%

Royal Bank of Scotland today capped a bumper week for the banking sector by reporting a 23% jump in first-half profits to £4.51bn.

But like its rivals earlier this week, Britain's saw a rise in money set aside to cover bad debts. RBS said charges for bad debts rose 5% to £887m in the six months to June 30.

However, the rise was smaller than at UK banks. HSBC, Barclays and Lloyds TSB have all reported a rise in bad debts amidst a record number of personal bankruptcies.

Income increased by 10% to £13.64bn, following growth in all its divisions. Trading was particularly strong in corporate markets, wealth management and at Ulster Bank, after profits rose 20% to £182m.

The chief executive, Sir Fred Goodwin, said: "We have always placed great emphasis on organic income growth, operating efficiency and risk management, and these are again visible hallmarks of the group's results."

Sir Fred said the major economies in which RBS operated were continuing to cope well with higher energy prices and rising interest rates.

"We expect them to achieve good growth, close to their long-term trend, over the next year," he said.

RBS has been expanding its overseas operations with investments in the US and China. The owner of NatWest and the insurance companies Churchill and Direct Line said 46% of its income growth came from outside the UK, underlining the growing importance of its international business.

But RBS still generates most of its revenues in the UK, where income was up 7% to £9.82bn.

International income rose by 17% to £3.82bn.

The Edinburgh-based bank maintained tight control on costs with its cost-to-income ration dipping to 41.9% from 42.2%.

Today's results from RBS rounded off a good week for the banking sector. HSBC posted profits of £6.71bn, Barclays made £3.67bn, Lloyds TSB had profits £1.78bn while Halifax Bank of Scotland notched up £2.65bn.