RBS has reserved £400m for a currency probe as it reported a third successive quarterly profit thanks to reduced costs and strengthening economic conditions.
The bank reported profit before tax of £1.27bn, 26% higher than the £1.01bn reported in the second quarter, which it attributed to strengthening UK and Irish economies.
The latest figures spell a return to profitability compared to the same quarter last year, when the bank made a loss of £828m.
Operating profits jumped 66% in personal business banking and 23% in commercial and private banking, boosting profitability. RBS shares were up 3.6% at 9.50am this morning, at 378.7p.
However, the bank confirmed it has set aside £400m as potential conduct costs, following investigations in the foreign exchange market.
The announcement comes a day after Barclays announced it had reserved £500m for a similar probe.
RBS chief executive Ross McEwan said: "We are reducing costs, and are on track to achieve our capital targets. UK and Ireland are showing signs of growth, and impairment trends are significantly better than we had anticipated at the start of the year."
Ulster Bank - which RBS was tipped to sell earlier this year - will remain a "core part" of the bank, he added.
RBS will continue to benefit from the recovery in the UK and Ireland in 2015, albeit at a more moderate pace, the results predicted.
Earnings per share for continuing RBS operations stood at 7.9p, compared to 1.9p for the previous quarter and a loss per share of 7.4p in the same quarter last year.
Profit attributable to ordinary and B shareholders was £896m, up from £230m in Q2 2014.
RBS has also boosted its capital ratios, with the Common Equity Tier 1 ratio strengthening 220 basis points since the year end to 10.8%.
The bank described its results in the European Banking Authority's recent stress tests, based on data from 2013, as "satisfactory".
