RBS profits up but warns over more pain to come

Royal Bank of Scotland has posted pre-tax profits of £2bn in the three months to 30 September, compared with a loss of £1.6bn in the same period last year.

RBS followed the likes of Barclays and Morgan Stanley in benefiting from a debt accounting gain, which boosted its earnings by £2.3bn and helped offset lower profits at its GBM investment banking division.

RBS added, however, that it had taken a further impairment loss of £142m on its exposure to Greece during the third quarter.

"RBS's third quarter results show the improved strength and resilience we have built up since 2008," Chief Executive Stephen Hester said in a statement.

"They also highlight the external pressures facing banks, and economies more broadly, which are making the road to recovery longer and bumpier than hoped for," he added.



In a statement, RBS said that its retail operation was "holding up well", but that the investment bank side was "only modestly profitable".

The UK government owns 84 per cent of RBS after having to rescue the bank with a taxpayer-backed bailout in 2008.

RBS shares have fallen by nearly 50 per cent over the past year.