Royal Bank of Scotland (RBS) said its 2005 financial performance would meet analysts' expectations amid strong growth in corporate banking and at US unit Citizens.
RBS, the parent company of Ulster Bank and First Active, said it expects to report good growth in income for the year and would generate the expected benefits from recent acquisitions.
But its shares fell as dealers said the update failed to match the upbeat tone of smaller rival HBOS earlier in the week, prompting selling after a rise of over 10 per cent since mid-October.
By 8.24am, RBS shares were down 1.7 per cent at 1,682 pence, one of the day's weakest UK blue-chip shares.
RBS chief executive Fred Goodwin said the bank saw no acquisitions in the near future, bringing the prospect of share buybacks closer.
"We've fulfilled all of our acquisition priorities . . . as we've been indicating for some time there are no immediate acquisition priorities or opportunities on the landscape," Mr Goodwin told reporters.