RBS reports surprise rise in profit

Royal Bank of Scotland (RBS) has said it expects pre-tax profits of £2.65bn for the first half of the year, up from £1.37bn last year.

The bank said it had set aside much less money for bad loans than expected – down from £2.15bn to £269m.

The UK taxpayer continues to own 80% of the bank after a government bailout in 2008.

RBS chief executive Ross McEwan warned that despite better than expected results of “bumps in the road ahead of us.”

RBS shares rose more than 11% in early trading on Friday.

The company said it released its results a week early because they were significantly stronger than the market was expecting.

“These results show that underneath all the noise and huge restructuring of recent years, RBS is a fundamentally stronger bank that can deliver good results for customers and shareholders,” Mr McEwan said.

A general pickup in the UK economy helped to improve the value of RBS loans, the company said.