Photograph by Chandres
Royal Bank of Scotland (RBS) has said that it will not split the company into ‘good’ and ‘bad’ banks, but instead ring fence a ‘bad bank’ with £38 billion of bad assets internally.
Alongside the ringed fenced bad assets, RBS has also had to set aside £250 million for mis-selling payment protection insurance (PPI).
RBS is currently 81% owned by the UK government after the 2008 bail-out, but unlike with Lloyds Bank, it may be a number of years before the RBS share price would mean the government could make a profit on the public money invested.
A report published today into RBS’ small business lending practices by Sir Andrew Large found that the bank was performing so badly in this sector it failed to meet even its own conservative targets.
In their third quarter results also published today, RBS posted a £634 million loss, with their share price tumbling 4% to 353p as a result of all the news.
