The Royal Bank of Scotland (RBS), the second largest provider of UK current accounts and other banking products in the country, has announced profits of £9.2bn for 2006 – up 11% on the previous year.

RBS owns a number of familiar brands in the personal finance arena, such as Churchill Insurance, NatWest and Direct Line and the bank said that all of these had performed well, although 42% of its operating profit came from outside the UK.

It also explained much of the gain it recorded last year came from its investment and corporate banking division, with profits in the latter section amounting to £5.55bn, up 20% on last year’s figure.

Although there is much criticism of ‘excessive’ bank profits from consumers whose primary contact is via their UK current accounts, RBS said that only £1 in every £33 of its profit growth was generated by retail banking.

There were also concerns about bad debt, and the amount of bad debt RBS wrote off rose 15% to £1.34bn, with losses reading lower in the second part of the year.

Credit card debts had stabilised and the growth in arrears on unsecured personal loans was slowing.