Technology cuts increase RBS profits

RBS is in profit for the first time in three years, partly due to new technology efficiencies

RBS has cut IT costs and is now in profit

Publicly owned lender Royal Bank of Scotland has announced a profit of £9m for the first half of 2010, up from a loss of £1.04bn in the first half of 2009.

The profits are partly due to reduced costs, as its announcement explains. Group costs declined by seven per cent to £4.1m, which was partly due to savings from RBS Business Services, which provides technology to the group's customer-facing divisions.

Business Services costs totalled £1.2m in the second quarter, down one per cent from Q1 2010 and down nine per cent from Q2 2009.

Costs were further reduced by staff cutbacks. The lender has axed 23,000 jobs worldwide since October 2008, 17,000 of which were in Britain.

These results follow an announcement from Barclays yesterday that it had seen its profits rise to £3.95bn in the first half of the year, despite increased IT costs.

In its release, Barclays said: "Our strategic investment programme to invest £350m in people and technology is under way."

Expenditure in this programme was £33m in the first half of 2010 and is expected to increase to £80m for the second half of the year.