RBS shares slump three per cent

Royal Bank of Scotland shares have slumped by three per cent after it warned plans for an internal 'bad bank' with £38 billion of toxic loans will result in a substantial loss this year.

The bank had been threatened with a carve-up and nationalisation of its problem loans in a Treasury review, but will instead run down the assets at a faster rate..

The move means up to £4.5 billion to be written off in its balance sheet in the current financial year, causing shares to fall 12.9p to 354.7p.


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.