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 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.