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Royal Bank of Scotland (RBS) expects half-year earnings to beat its full-year forecast as the group lowers its level of bad debt.

In a trading statement ahead of the group's half-year results on June 30th, RBS said it had continued "to perform well in 2007". Rates of underlying earnings growth in the first six months were "slightly higher" than had been implied in its full-year forecast.

RBS, which is part of a consortium to have tabled an offer for the Dutch bank ABN Amro, added that impairment losses were also expected to undergo a "modest reduction" as the group continues to monitor and control its costs.

Highlights expected to appear in the bank's half-year results include good organic growth, "disciplined" expense control and a measured investment in fast-growing businesses.

RBS' corporate banking division has sustained "good growth", according to the statement and it aims to expand its geographical footprint to offer new products from different markets.

Sir Fred Goodwin, chief executive of RBS, said: "We expect that our first half results will again demonstrate the group's ability to deliver profitable organic growth, building on the many opportunities with attractive risk and reward characteristics that we have established in the UK and internationally.

"I am confident that the Group will continue to capitalise on these opportunities and deliver another strong performance in 2007."

RBS has tabled an offer for ABN Amro along with Fortis and Sanrander as part of a consortium to rival the preferred bid from Barclays.

The Dutch bank confirmed the offer on May 29th and said its transaction committee was liaising with the bank's board.

Ulster Bank, which is already part of the RBS group, was said to have delivered "good growth" across the whole of Ireland.