Royal Bank of Scotland shares were up around 3% in early trading on Thursday after investors were convinced the bank was making a turnaround.
The bank, which is 78% owned by the government, said second quarter operating profit was unchanged at £304 million, while litigation and conduct costs fell to £459 million from £856 million in the previous quarter.
Meanwhile plans for its overhaul had progressed and, provisions to cover past misconduct were lower than feared.
RBS racked up costs of just over £1 billion in relation to its restructuring, which has involved shrinking the bank radically, selling off its US Citizens bank, separating the Williams & Glyn's business and cutting thousands of jobs.
Attributable profit in the second quarter was £293 million, up 27% year-on-year and well ahead of analysts' expectations for a loss of £260 million.
The government earlier this year announced plans to sell down its stake in RBS, which it has announced since it bailed out the lender at the height of the financial crisis.
Outgoing chairman Philip Hampton, who will be replaced by Sir Howard Davies later this year, said there is currently “an appropriate backdrop to the sale of shares”.
Prospective investors were told, however, that the bank did not expect to be in a position to pay a dividend until the first quarter of 2017 at the earliest.
Shares were last up 2.4% at 361.7p sending the stock close to the top of the FTSE 100 leaderboard.
