Real Madrid coach Carlo Ancelotti believes that Atletico Madrid are genuine title contenders following their 1-0 win over his side on Saturday evening.

Diego Costa's 11th-minute goal was enough to maintain Atleti's perfect start to their La Liga campaign, and Ancelotti feels that his side's local rivals have what it takes to sustain a title charge.

"I think Atletico are a very solid team with a lot of quality. They can compete for the league title," Ancelotti told reporters.

"Atletico Madrid deserved to win the game. They were organised and solid in defence. We must improve a lot of things including our attitude and confidence.

"I have faith in my players. The problem is not our style of play; it's with our pace."

Next up for Ancelotti's men is a visit from Copenhagen in the Champions League on Wednesday.