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RBS and Lloyds in major shake-up RBS and Lloyds in major shake-up
(10 minutes later)
Royal Bank of Scotland (RBS) and Lloyds Banking Group are to sell off bank branches in another major shake-up of the UK banking industry.Royal Bank of Scotland (RBS) and Lloyds Banking Group are to sell off bank branches in another major shake-up of the UK banking industry.
The sales have been demanded by the European Commission to safeguard competition concerns after the two were bailed out by the UK government.The sales have been demanded by the European Commission to safeguard competition concerns after the two were bailed out by the UK government.
Brussels has demanded that banks bailed out by taxpayers should be scaled down.Brussels has demanded that banks bailed out by taxpayers should be scaled down.
RBS will sell its RBS branch network in England and Wales and its NatWest brand in Scotland over the next four years.RBS will sell its RBS branch network in England and Wales and its NatWest brand in Scotland over the next four years.
Lloyds, which is 43.5%-owned by the government, also confirmed it would raise £21bn in return for staying out of a government-run insurance scheme to cover toxic bank loans.Lloyds, which is 43.5%-owned by the government, also confirmed it would raise £21bn in return for staying out of a government-run insurance scheme to cover toxic bank loans.
RBS has confirmed it will participate in the scheme on revised terms, the Treasury said.RBS has confirmed it will participate in the scheme on revised terms, the Treasury said.
"The likely costs to the taxpayer and the risks on the impact on the public finances have been reduced," the Treasury said."The likely costs to the taxpayer and the risks on the impact on the public finances have been reduced," the Treasury said.
Branch sell offBranch sell off
In addition to the sales of RBS England and Wales - originally Williams & Glyn's - and NatWest Scotland branch sales, RBS will sell RBS Insurance and Global Merchant Services, its card payment business.In addition to the sales of RBS England and Wales - originally Williams & Glyn's - and NatWest Scotland branch sales, RBS will sell RBS Insurance and Global Merchant Services, its card payment business.
The total disposal will be 318 branches in the UK, or 14% of the RBS retail network.The total disposal will be 318 branches in the UK, or 14% of the RBS retail network.
"I believe today marks a key milestone in the radical restructuring we are undertaking to bring RBS back to standalone strength," RBS chairman Stephen Hester said."I believe today marks a key milestone in the radical restructuring we are undertaking to bring RBS back to standalone strength," RBS chairman Stephen Hester said.
RBS said the moves would cut its UK market share by 2 percentage points in retail banking.RBS said the moves would cut its UK market share by 2 percentage points in retail banking.
It will also sell its stake in commodities trader RBS Sempra Commodities.It will also sell its stake in commodities trader RBS Sempra Commodities.
Lloyds will sell at least 600 branches, or about 4.6% of the total market share of UK current accounts.
That includes the TSB brand in England, Wales and Scotland and mortgage broker Cheltenham & Gloucester, as well as the Intelligent Finance online business.
Lloyds says the businesses that it will have to sell off account for about £30bn of customer deposits and £70bn of lending, generating income of £1.4bn in the year to December 2008.