Royal Bank of Scotland: Trading in line with expectations
The Royal Bank of Scotland (RBS) shares rose after reporting trading is in line with expectations and its integration of ABN Amro is on track.
The bank said operating performance of many of RBS's businesses since the beginning of 2008 remains good - although results have been held back by the effects of the continuing deterioration in credit markets.
RBS also said the integration of ABN Amro has made "good progress", with cost savings slightly ahead of target.
Following its £12 billion rights issue, the bank said its tier 1 capital ratio is expected to be in excess of eight per cent and its core Tier 1 ratio in excess of six per cent by the end of the year.
The cash call was supported by more than 95 per cent of shareholders and was announced to shore up its balance sheet following the credit crunch and the acquisition of Dutch bank ABN Amro.
Sir Fred Goodwin, group chief executive, said: "While we remain very much open for business, our risk appetite is tempered by a cautious stance in relation to short term economic factors and market conditions."
The bank also said it remains confident of selling its insurance arm for the price it originally wanted, despite tough market conditions.
RBS, which owns the Churchill and Direct Line brands, reportedly hopes to raise £7 billion from the sale.
Analysts expect RBS to make around £9.6 billion in pre-tax profits this year despite the slowing economy.
Shares in RBS rose by 2.89 per cent on the London Stock Exchange this morning, leading a banking rally.
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