Royal Bank beats forecasts

The bank is reaping the benefits of the Natwest takeover

The Royal Bank of Scotland has become the latest bank to report a strong set of profit figures.

Pre-tax profits at the firm, which following the takeover of the Natwest ranks as the UK's second largest bank, rose by a quarter to £3.3bn last year.

That compares to £2.7bn in 1999.

Banking results 2000

Barclays up 42% (£3.5bn)

Royal Bank of Scotland up 25% (£3.3bn)

Halifax up 21% (£885m*)

Abbey National up 17% (£2.1bn)

Lloyds TSB up 12% (£2bn*)

*half yearly figures

And the bank, which shed 7,300 staff in 2000, said it was on course to reap the cost savings forecast at the time of the merger.

The profits were well ahead of City forecasts.

"A decade of growth has culminated in a year of outstanding achievement," said Viscount Younger, bank chairman.

Takeover of Natwest

The bank bought Natwest in a hostile bid last year after a fierce battle with arch-rival Bank of Scotland that lasted several months.

Since then the company has been a strong performer on the stock market, outperforming the rest of the UK banking sector by 45%.

Viscount Younger said that the takeover "has had a significant effect on the group's financial position".

And he added that it had "created a larger group which combines scale and financial strength with an innovation and growth culture".

Royal Bank is currently being investigated by the UK's Competition Commission which is looking into its 30% market share for banking services to small businesses.