RBS has become the last of Britain’s major banks to announce a healthy return to profit this year.

After receiving a Government bailout during the financial crisis, RBS has posted a £9million profit for the first half of this year, compared with a loss of £1.4billion this time last year.

The bank is 83 per cent tax payer owned has seen a dramatic turnaround since 2008, when it reported a £24.1billion loss – the largest annual loss in UK corporate history.

Despite today’s good results RBS’s profit was considerably less than the UK’s other major banks, which have also posted better than expected results this week.

HSBC kicked the week of with an announcement of £7 billion, followed by Lloyds Banking Group and Barclays which also saw their balance sheets back in the black.

Investors’ confidence has been boosted by the news, which today pushed RBS’ share price up by 2 per cent.

Like the other banks RBS has thanked a reduction in bad loans for its return to profit. It also saw a reduction in costs after cutting 23,000 jobs worldwide at the peak of the financial crisis in 2008.

However, Chief Executive Stephen Hester said the bank still has a long way to go and is only 18 months into its five year recovery plan: “’The rebuilding of RBS is a marathon not a sprint.

“I am pleased with the steady momentum in our core customer-facing businesses. However, our path to the sustainable profitability and other improvements we target will not be linear, given the scale of management action in our core businesses, continuing risk reduction in non-core and the impact on both of a changeable economic and regulatory environment.”

As part of RBS’ five year recovery plan it has sold 318 branches to Spanish bank Santander this week.

The Share Centre has also warned that despite profitable results RBS still remains a risky investment, urging investors to see it as a sell opportunity.

“RBS is seemingly moving in the right direction with these results and although the five year plan makes sound business sense it still remains a high risk investment.  It is worth noting that the sooner the Government stake can be sold, the sooner the bank can start awarding dividends again.”

© Fair Investment Company Ltd