ROYAL Bank of Scotland's high bad debt charges in Ireland and a weak investment banking performance overshadowed the bank's return to profit in the final months of 2010.

RBS, bailed out with billions of pounds of taxpayers' money during the credit crisis, posted an overall loss of 1.1 billion pounds (US$1.78 billion) in 2010, largely driven by losses at its Ulster Bank arm.

The bank scraped back into a slight profit in the final months of 2010 but impairment losses during the fourth quarter rose to 930 million pounds from 782 million the previous quarter.

Investors were also disappointed by a drop in profits at RBS' lucrative investment banking arm.

"The situation in Ireland has had a painful effect on the bank's numbers however, whilst in line with many of its global peers the investment banking arm has failed to inspire," said Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers.

Both RBS and British rival Lloyds, which reports results today, were bailed out by Britain during the 2008 credit crisis, which left the government with an 83 percent stake in RBS and a 41 percent stake in Lloyds.

Britain eventually plans to sell those stakes but RBS Chief Executive Stephen Hester told reporters a sale was unlikely before the Independent Commission on Banking - set up to examine a potential break-up of the United Kingdom's top lenders - publishes its final report in September.

Yesterday, Qatari Prime Minister Sheikh Hamad bin Jassim bin Jabr al-Thani said Qatar was open to buying stakes in both RBS and Lloyds. Hester said this matter was one for the British government to comment upon.