RBS announces record £8.1bn profit

Royal Bank of Scotland today announced a 15-per-cent rise in annual profits to a record £8.1 billion after a strong performance across its businesses.

Royal Bank of Scotland today announced a 15-per-cent rise in annual profits to a record £8.1 billion after a strong performance across its businesses.

The figure, which is before the inclusion of exceptional items, was at the top end of analysts' expectations and marked the NatWest owner's eleventh consecutive year of double-digit growth.

It adds to the bumper £30 billion the UK's big banks are expected to rake in this year, far outstripping the £4.6 billion announced by Barclays earlier this month.

The performance is better than the record £7.7 billion reported by HSBC last year, although RBS's UK rival should reclaim the crown next week.

The UK's second largest bank said it achieved strong growth from its existing businesses while integrating a string of acquisitions made during the year.

The £5.8 billion acquisition of Charter One Financial last year means that RBS now generates around a quarter of its profits from the United States.

During the period, RBS also bought firms including First Active in Ireland and the credit card business of People's Bank in the United States.

Much of today's growth came from its corporate banking arm, where profits rose by 18% to £4.27 billion in the year to December 31.

This was followed by the retail banking division with a smaller 3% hike in profits to £3.28 billion.

RBS, which owns Direct Line and Churchill Insurance among other businesses, said growth was strong in virtually all of its economies.

This trend was expected to continue to grow during 2005, although at a "slightly slower" rate.

Chief executive Fred Goodwin said: "Whilst in the UK we would expect the transition away from customer credit-led activity to continue, the outlook for employment and the economy remains positive."

Bottom line pre-tax profits, including goodwill and the cost of integrating acquisitions, rose by 14% to £6.92 billion.