LONDON (ShareCast) - Shares in Royal Bank of Scotland initially rose as the bank’s trading update contained little new information to upset investors. The bank expects group and divisional performance trends to continue to track the guidance provided at its update at the end of April.

However, the sparse amount of new information about the group’s disposal of its insurance and train assets perturbed many analysts, while comments in a conference call from chief executive Sir Fred Goodwin that the board is “looking on the next six months with caution” saw support for the shares ebb away.

Write-downs on credit market exposures are expected to remain within the estimates indicated in April when the firm unveiled new write-downs of £4.3bn after tax. Underlying results, excluding write-downs, are expected to remain “satisfactory”.

"The group's loan portfolio remains robust, with a continued reduction in UK personal sector impairment losses but increased US impairments, principally in a specific retail portfolio," added the group.

It confirmed its previous guidance that at 30 June 2008 it expects its Tier 1 capital ratio to be in excess of 7.5% and its core Tier 1 capital ratio to be in excess of 5%, on a proportional consolidated basis.

At the end of 2008, the Tier 1 capital ratio, on the same basis, is expected to be over 8% and its core Tier 1 ratio more than 6%.

Elsewhere in the banking sector Alliance & Leicester was stuck in reverse ahead of its likely demotion from the FTSE 100.

Crude oil for July delivery has risen more than $3 in early trading in New York, boosting demand for the likes of BP, BG Group and Shell. Elsewhere, the defensive qualities of tobacco stocks find favour as the Footsie slips further into the red.

Top performing sectors so far today
Oil & Gas Producers 8,695.90 +1.23%
Tobacco 24,100.90 +0.51%
Industrial Engineering 3,795.30 +0.28%
Gas, Water & Multiutilities 4,514.10 +0.06%
Aeronautics and Defence NULL 0.00%

Bottom performing sectors so far today
Chemicals 5,016.10 -6.78%
General Retailers 1,363.20 -5.87%
Banks 6,570.20 -4.26%
Life Insurance 4,515.10 -3.71%
Household Goods 5,490.80 -3.35%

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