High street bank The Royal Bank of Scotland (RBS) has announced a rise in the money it has lost due to borrowers getting into bad debt and being unable to make repayments.

Despite the bank announcing half-yearly profits of £4,603 million, a growth of 15 per cent from the previous year, losses from lending impairment rose by five per cent, with UK unsecured lending faring particularly badly.

Group finance director for RBS, Guy Whittaker, said that losses from credit card lending were 14 per cent higher than the year before, but the bank believed that the worst of the losses from credit cards were behind it.

However, losses coming from personal loans, which account for two-thirds of the bank's business, grew by 22 per cent and may continue to grow for some time, although the rise in arrears seemed to be slowing, he said.

The announcement came in the wake of figures showing that the number of people declaring themselves insolvent or bankrupt soared by 66 per cent in the second quarter of 2006, compared with the same time last year.

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