Royal Bank of Scotland's performance and writedowns on risky assets remain in line with its previous guidance, but its results will be held back by the impact of the global credit crunch, it said in a trading statement today.
It said it also remained confident of selling its insurance arm for the price it had in mind at the start of an auction, despite speculation tough markets have dampened interest.
RBS, which owns Ulster Bank in Ireland, raised £12 billion in the biggest ever rights issue earlier this week, said it was adopting a cautious stance towards risk in the light of jittery markets and economic storm clouds.
However, it said the benefits - in terms of both income and cost savings - from last year's purchase of large parts of Dutch group ABN AMRO, were running slightly ahead of target.
By 7.30am RBS shares were up 2.5 per cent at 239 pence, one of the top performing UK stocks and helping other banks higher.
European banks also got a boost from a media report that Russian billionaire Suleiman Kerimov has been buying shares in major Western banks.
RBS is seeking to top up its rights issue proceeds with asset sales boosting capital by £4 billion pounds this year.
The bank expects its core tier 1 capital ratio to be over 5 per cent at the end of this month, and above 6 per cent by the end of the year, helped by asset sales.