Royal Bank of Scotland boss Fred Goodwin yesterday highlighted his company's organic growth record after revealing further progress in the year to date.

Mr Goodwin, who has come under pressure from share-holders worried by the number of acquisitions made by RBS in recent years, said figures for the first half of the year showed the "inherent strength" of the bank's business.

He added: "Organic growth has been a key element of the group's strategy and a prominent theme in our results over recent years."

In a trading statement, RBS said interim results due on August 4 were expected to be in line with market expectations. It added that growth in impairment losses - cover-ing bad debts - was expected to be lower than the growth in loans and advances.

Fears that Mr Goodwin may be lining up further major acquisitions have weighed on the company's share price in recent months, even though it beat expectations in February with a 21 per cent rise in pretax profits to £7.94 billion.

Big cross-border deals have included the £5.8 billion purchase of Charter One Financial in the United States in 2004.

In addition, RBS led a group of investors in the purchase of a stake in Bank of China - the second largest bank in the Asian country - for $3.1 billion (£1.7 billion) in August.

However, that move appeared to have paid off after a bullish debut by Bank of China on the Hong Kong stock exchange ensured a trebling in the value of the the UK bank's stake.

Mr Goodwin said UK banks and shares had been out of favour but could benefit if investors reduce their appetite for risk.

"UK equities and UK banks have been undervalued, and we would like to see the RBS valuation higher because the quality of the business certainly warrants it," he added.

RBS's net interest margin is expected to be lower in the first half, in line with guidance given in February, mainly due to changes in the product mix and the impact of a flatter yield curve in the United States, it said.

This will constrain the earnings of its US arm, Citizens, which achieved good growth in its business activities, the bank said.

"Whatever the shape of the yield curve, our business can grow and develop.

"It's just the rate of that growth is impacted," Mr Goodwin said.

He played down the prospect of any large acquisitions, echoing comments made by the bank for many months.

"Our position is unchanged," he added.