Royal Bank of Scotland expects difficult market conditions in the fourth-quarter, with banks around the world hit by Europe's debt crisis, and the part-nationalised lender added it had taken more writedowns on its Greek exposure.

RBS, which is 83-percent owned by the British government following a state bailout during the 2008 credit crisis, said on Friday that it had made a third-quarter net profit of around 1.2 billion pounds.

RBS followed the likes of Barclays and Morgan Stanley in benefiting from a debt accounting gain, which boosted its earnings by 2.36 billion pounds and helped offset lower profits at its GBM investment banking division.

RBS added, however, that it had taken a further impairment loss of 142 million pounds on its exposure to Greece during the third quarter.

RBS's third quarter results show the improved strength and resilience we have built up since 2008, Chief Executive Stephen Hester said in a statement.

They also highlight the external pressures facing banks, and economies more broadly, which are making the road to recovery longer and bumpier than hoped for, he added. (Reporting by Sudip Kar-Gupta; Editing by Myles Neligan)