Pre-tax profits for 2006 should beat forecasts of Â£9.2 billion, RBS said, suggesting an increase in profits of more than 11 per cent, compared with the Â£8.25 billion record for 2005.
Strong growth in the bank's corporate markets together with increased income from trading activities was cited as a factor in the strong performance.
Retail banking also performed well over the year, RBS said, with growth in income and a strong mortgage lending business. Bad debt losses were also continuing to moderate, the bank said.
"Our 2006 results will underscore the diversity of our income and inherent strength of our business model," commented RBS chief executive Sir Fred Goodwin.
"We expect to deliver profitable organic growth and improvements in key financial metrics, while continuing to invest in our businesses and generating surplus capital."