- Royal Bank of Scotland more than doubled its first-half profit and declared a special dividend, as cost cutting and gains from an asset sale offset margins pressure from intense mortgage-market competition.

The lender also warned that it was 'very unlikely' to achieve its 2020 financial year targets of a return on equity of more than 12% and a cost-to-income ratio of less than 50%. It blamed current market conditions and economic uncertainty for the warning.

'These remain our strategic targets and we believe they are achievable in the medium term,' RBS said.

Attributable profit for the six months through June rose to £2.04bn, up from £888m on-year.

Operating pre-tax profit rose 48% to £2.69bn amid a 6.2% rise in total income to £7.12bn.

The rise in income was driven by a £444m gain relating to the Alawwal bank merger, FX recycling gains of £290m and a £256m legacy liability release.

The bank's net interest margin fell 5 basis points to 2.02%, reflecting competition in mortgage markets.

Impairment losses more than doubled to £323m, up from £141m, which RBS said primarily reflected a small number of single-name charges in commercial banking.

RBS, which has yet to name a replacement for outgoing chief executive Ross McEwan, declared an interim dividend of 2p per share and a special dividend of 12p per share.

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