Royal Bank of Scotland (RBS ) made a total pre-tax profit of £1.27 billion ($2.03 billion) in the third quarter thanks to previously underperforming loans in Ireland being revalued.
The bank has set aside £400 million to cover expected fines related to allegations its traders conspired to rig foreign exchange rates. A further £380 million provision has been made to cover other overhanging scandals, like payment protection insurance (PPI) mis-selling.
Rival Barclays on Thursday announced it had set aside £500 million for the same purpose. The two banks are just two of several currently negotiating a settlement with U.K. authorities.
During the same quarter last year, RBS made a pretax loss of £634 million.
The improvement in performance has happened partly because of improved economic performance in the U.K. and Ireland. Assets of RBS's Ulster Bank, once viewed as a likely candidate for sale, have been revalued and debts which were previously seen as write-offs seem to be more viable.
Ross McEwan, chief executive of RBS, confirmed: "Ulster Bank remains a core part of our bank."