LONDON: Royal Bank of Scotland scraped back into profit in the final months of 2010 after huge losses last year and the part-nationalised British lender said its recovery plans were ahead of schedule.
RBS's return to profit will help smooth the way for the UK government to return the bank to private hands at some stage after RBS was bailed out by taxpayers in October 2008 during the credit crisis.
RBS posted a full-year operating profit of 1.9 billion pounds ($3.1 billion) for the year ending December 2010, compared with a 6.1 billion pound loss a year earlier.
"Two years on from the global financial crisis, RBS's recovery is ahead of schedule," Chief Executive Stephen Hester said in a statement.
Earnings were boosted by lower bad debt charges, and the profit figure was ahead of an average forecast for a 1.5 billion pound operating profit from Thomson Reuters I/B/E/S estimates.
On a pretax basis, RBS remained in the red last year to the tune of 239 million pounds versus a 1.9 billion pound loss in 2009 but said it had swung back into the black on all measures in the final three months of last year.
It scraped a 4 million pound pretax profit in the fourth quarter and a 12 million pound net profit.
The bank was propped up with 45 billion pounds of taxpayers' money, leading to the resignation of then chief executive Sir Fred Goodwin. The government ended up with a stake of around 83 percent.
As a result of the government bailout, RBS was ordered by European regulators to dispose of a range of assets by 2013, including its insurance division.
RBS said on Thursday that preparations for the sale of its insurance arm were continuing, and that its overall restructuring programme was progressing well.
RBS' results will be followed on Friday by those of rival Lloyds, also part-owned by the government.
Last week Barclays posted a sharp rise for its 2010 profits.
Britain plans to sell its shares in RBS and Lloyds eventually. But no sale is likely before the UK's Independent Commission on Banking, set up to probe the banking sector, publishes its final report in September.
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