Royal Bank of Scotland has reported a large rise in pre-tax profits, from £15 million in the first six months of 2009 to £1.14 billion for the first half of this year.
The banking group, which is 84% owned by the taxpayer, also reported an operating profit of £1.6 billion compared with an operating loss of £3.4 billion in 2009.
Net UK mortgage balances grew by £2.4 billion in Q2 2010, up 20% from Q1 2010 and with gross new lending of £4.9 billion. In the second quarter the group helped more than 10,000 customers to move into their first home, 52% more than in the corresponding period of 2009.
With net lending of £3.2 billion in the four months March-June 2010, RBS says it is on course to achieve its £8 billion mortgage lending target for the March 2010 to February 2011 period.
RBS said the mortgage market showed some signs of weakness in the quarter, with application volumes 21% lower than a year earlier, although acceptance rates remain at around 90%. Redemptions have increased, reflecting the roll-off of a large number of customers from fixed term mortgage deals, as well as greater competition in the market.
During Q2 2010, the group extended £12.7 billion of gross new facilities to UK businesses, 22% higher than the previous quarter and a 27% rise from Q2 2009.
RBS admits that while this represents an improved performance, overall activity levels remain somewhat subdued, with many businesses continuing to reduce their existing borrowings.
Within the overall business lending total, gross new facilities of £7.0 billion were extended to SMEs during Q2 2010. Although up 15% year-on-year, this represented a decline of 5% from Q1 2010.
Stephen Hester, RBS group chief executive, said: “RBS second quarter results show that the Bank remains on track to meet the far-reaching goals of our five year restructuring plan which commenced last year. We are making good progress with disposals and overall business restructuring. Our customer base is solid and I believe that the future potential of RBS for all its constituencies becomes increasingly visible.”””
