LONDON (Reuters) - Royal Bank of Scotland beat expectations on Friday with a 23 percent rise in first-half profit, as its corporate markets unit grew strongly and it kept a tight control on costs.

Britain's second-biggest bank said pretax profits in the six months to the end of June rose to 4.51 billion pounds, above an average analyst forecast of 4.35 billion.

A strong performance by its global banking and markets unit, which is effectively its investment banking business, helped operating profit from the corporate markets unit rise 21 percent, with both income and costs up 16 percent.

RBS said its charge for bad debts rose 5 percent to 887 million pounds in the first half, a smaller rise than shown by other UK banks this week, which have been hit as consumers have struggled to pay back unsecured loans.

"It's a pretty good result. The corporate bank has done very well -- the impairment charge there is down quite a lot, which helps support the group and means the overall impairment charge is very modest compared to its UK peers," said analyst James Hamilton at WestLB in London.

"In terms of the negatives, I think the insurance division should have done better given the results we have seen from HBOS and Lloyds TSB, but the group is still continuing to grow."

RBS shares were flat in early trade at 17.19 pounds. The stock hit 19.52 pounds in March, its highest level for four years, but has since slipped back, leaving it with one of the lowest valuations among global banks. Continued...

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