RBS avoids 'bad bank' split

Royal Bank of Scotland today reported a sharp fall in operating profits to £438 million for the third quarter, from £909 million a year earlier. The bank is also to create an internal 'bad bank' with £38bn of problem assets, avoiding a full split.

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Chief executive: 'Bar has been set higher for RBS'

The Royal Bank of Scotland's chief executive Ross McEwan has said that the 'bar has been set at a higher' for RBS than other banks because it was rescued at the public's expense.

The bar has been set at a higher level for RBS than for other UK banks because we were rescued at the public’s expense.

I have asked all our people to embrace the higher expectations that people have placed on our bank.

That’s the only way we will build a really great business for our customers, our people and our shareholders. That’s my aim.

– RBS chief executive Ross McEwan

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RBS move 'to improve lending to businesses'

Creating an internal "bad bank", rather than carving up RBS, will improve lending to businesses, today's Treasury report is likely to argue.

The 80% state-owned lender is likely to make the announcement alongside its third-quarter results, which are forecast to show operating profits of £800 million in the three months to the end of September, lower than the £1.05 billion reported a year earlier as its investment bank shrinks.

Read: RBS: New boss, new priorities?

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RBS expected to avoid full split in Government ruling

The Royal Bank of Scotland is expected to avoid demands for a full carve-up when the Government rules on the lender's future today.

The Royal Bank of Scotland is expected to avoid demands for a full carve-up when the Government rules on the lender's future today.
The Royal Bank of Scotland is expected to avoid demands for a full carve-up when the Government rules on the lender's future today. Credit: PA

Soured loans and toxic assets will instead be placed in an internal "bad bank", instead of demanding a full split of the part-nationalised lender, a Treasury-commissioned report is set to say.

Read: RBS: New boss, new priorities?

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