A pedestrian walks past an RBS branch in the City of London

RBS Group posted a 6.7 percent slide in first half operating profits as the state-owned bank continues to shed assets and bolster its capital base.

The Edinburgh-based bank said group operating profit for the first 6 months of the year fell to £1.834bn from £1.966bn during the same period last year. A large portion of the decline, however, relates to a £2.974bn charge the bank booked for the period linked to the increased value of its own bond in the capital markets.

Accounting rules demand that companies set aside cash to cover the theoretical cost of buying that debt back in the open market. On a quarterly basis, profit fell 22 percent in the three months ending in June to £650m from £833m in the same period in 2011.

"The first half of 2012 saw RBS make good progress on both of the jobs that make up our recovery plan," CEO Stephen Hester said in a statement released with the earnings. "We have continued to make the bank safer and stronger as we clean up problems of the past. And despite the tougher economy, these results show our on-going businesses to be more resilient than before with many further improvements underway."

RBS shares rose more than 4 percent in the first hour of trading in London, changing hands at around 212.6 pence each. The shares have gained less than 2 percent since the beginning of the year.

The bank, which is 83 percent owned by the UK taxpayer, also said it had dismissed a number of traders and employees in relation to on-going investigations into alleged manipulation of inter-bank lending markets known as Libor. The bank said it has been named as a defendant in "a number" of legal actions stemming from the probe in the United States but that it could not measure what affect they may have on the banks finances in terms of fines paid or settlements agreed.

"The LIBOR situation is on our agenda and is a stark reminder of the damage that individual wrongdoing and inadequate systems and controls can have in terms of financial and reputational impact," RBS said. "This is the subject of on-going regulatory investigation but our customers and shareholders should be in no doubt that we are taking it seriously. These issues together are hard to deal with but just as necessary a part of change from the past as the restructuring of our balance sheet. "

RBS also said it had set aside around £310m to compensate small and medium-sized business clients who had been mis-sold interest rate swap products and retail customers who had been mis-sold so-called payment protection insurance, or PPI. The provision includes around £125m to compensate the 15m customers whose accounts were inaccessible for several days in June due to a system-wide computer failure.

The bank shed around £22bn in so-called "third-party" assets in the six month period, according to the statement, and now holds around £72bn. It says it's on target to reduce that further to around £60bn by the end of the year.