Jubilant investors returned £4.5 billion to Royal Bank of Scotland's market value this morning as they applauded lower-than-expected writedowns and strikingly good news on profits growth.

Whether it remains so at the end of today is a moot point but, at least for the moment, the Edinburgh-based bank is once again a £50 billion FTSE 100 giant.

But despite a near 10 per cent rise in the shares today, on the back of a 6 per cent increase yesterday, RBS is still down almost 29 per cent since March, when it recorded its 719p high for the year.

Sir Fred Goodwin, the bank's chief executive, was reassuringly straightforward about the RBS bottom line. Yes, there would be writedowns; and yes, RBS had benefited from asset sales such as Southern Water.

But even stripping all this away, pre-tax profits for the year will be "comfortably ahead" of the £9.9 billion consensus forecast among analysts.

It is something of a hackneyed phrase, but RBS did actually benefit from its geographical spread and broad product lines.

The global banking and markets arm, effectively the investment bank, took the pain of the writedowns but still grew well. Corporate and retail banking, even in the fearsome UK market, performed well. Wealth management and bancassurance were good performers.

RBS has momentum in the US, Asia and the UK.

Sir Fred can even be forgiven for employing the new bank ruse of seeing the discount present in some of its debt securities as a positive benefit if it bought back its own paper. RBS offset £250 million of its £1.5 billion writedowns this way, as have many of its peers in the sector.

Investors have chosen to ignore RBS's predictions of a slowdown next year, with both the US and UK economies under strain.

Nevertheless, the worries are there, alongside the still considerable challenges of integrating the sprawling ABN Amro empire into RBS's profits machine.

Sir Fred appears to have emerged from the credit crunch largely unscathed. That doesn't mean his concerns are over. If the rumours about bonus spats with ABN bankers are true, a whole new set of expensive headaches could be on the way.

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