Bailed-out Royal Bank of Scotland says investments improving with UK economy

Taxpayer-owned Royal Bank of Scotland says strong economic conditions are boosting its finances and that it expects to take a smaller hit from bad investments this year.

The bank, which was rescued by the British taxpayer during the 2008 financial crisis, issued an unscheduled trading update on Tuesday to report it would "significantly outperform" its previous guidance of 1 billion pounds ($1.6 billion) in impairment charges. It says it now expects to put aside only half a billion pounds for bad loans.

Rising property prices in Ireland have helped its Ulster Bank unit. RBS Capital Resolution, which contains toxic investments, has improved with the economy. RBS says uncertainties remain, however.

The bank is undergoing a sweeping restructuring to focus on its core business in the U.K.