Royal Bank of Scotland (RBS), the parent group of Ulster Bank and First Active, sought to reassure investors yesterday and allay analysts' fears, saying its results would be "well ahead" of market forecasts, with credit crunch write-downs of £950 million (€1.3 billion) well below those forecast.

Analysts had been expecting profits of £9.78 billion but the bank said profits could exceed £10 billion (€13.8 billion) for the first time. RBS shares closed 2.7 per cent higher at 478.5p.

RBS said Ulster Bank had "continued to perform well across the island of Ireland, with strong growth in loans and advances, particularly business lending, and in deposits".

It said it would continue to invest in Ulster Bank's "product and distribution capabilities".

RBS, Britain's second-largest bank, said it had been "comparatively unaffected" by the market turbulence and the write-downs were well below the £1 billion to £2 billion range expected. RBS chief executive Fred Goodwin said the acquisition of ABN Amro in October was expected to produce "better financial returns than we envisaged at the time of the bid". RBS will consolidate 100 per cent of ABN between the acquisition date and the year end, before dividing up the business with its bidding partners.

Another £300 million of writedowns could come from ABN's US mortgage-related assets, but these would be dealt with as part of the acquisition. Mr Goodwin said it had not been "beer and skittles this year, but we're anticipating a strong set of results".

(Additional reporting, Financial Times service)