Good trading to boost RBS profits

RBS is the UK's second-largest banking group behind HSBC

The Royal Bank of Scotland (RBS) has said its 2006 pre-tax profits should beat market forecasts of £9.2bn ($18bn) after 12 months of good performance.

This would mean annual profits at RBS, which owns both NatWest and Churchill Insurance, increasing by more than 11% from the £8.25bn it made in 2005.

The UK's second-largest banking group said its retail arm had done well.

It said stronger mortgage lending in the first half of the year had offset weaker demand for consumer credit.

RBS also added that it had enjoyed a strong performance by its corporate markets unit, and that the group's bad debt losses were continuing to moderate.