UK unsecured personal lending has slowed - RBS

There are signs that the increase in personal lending arrears may be leveling off, but it is too early to conclude that arrears have peaked, the Royal Bank of Scotland said in a trading update.

The bank published the update ahead of its close period for the year ending December 31, 2005. RBS also said that the growth in unsecured personal lending had slowed to more normal levels after strong growth in recent years.

RBS group chief executive Sir Fred Goodwin said: "Whilst market conditions in the UK have clearly changed during 2005, it is pleasing that as a result of the diversity of our income streams, the group expects to be able to continue to deliver good results and strong financial metrics for the year."

The group added that the net interest margin in the full year 2005 is likely to be slightly lower than in the first half due to higher growth in large corporate and mortgage lending and because the US yield curve has flattened further. The bank predicted the overall results to be in line with market expectations.