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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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.

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. 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.

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