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George Osborne says RBS breakup decision imminent George Osborne says RBS breakup decision imminent
(about 5 hours later)
George Osborne has said he expects to make a decision about the breakup of the Royal Bank of Scotland (RBS) imminently.George Osborne has said he expects to make a decision about the breakup of the Royal Bank of Scotland (RBS) imminently.
The chancellor said he was looking to hive off weaker parts of the state-controlled firm into a "bad bank"The chancellor said he was looking to hive off weaker parts of the state-controlled firm into a "bad bank"
He told the Daily Telegraph the issue was "top of his in-tray" and that a decision could be expected within the next few weeks.He told the Daily Telegraph the issue was "top of his in-tray" and that a decision could be expected within the next few weeks.
"We are looking at the case for a bad bank and, if not a bad bank, what is the alternative strategy that really gets on top of the problems in that bank and goes on being what I want it to be, which is a bank supporting the British economy," Osborne said."We are looking at the case for a bad bank and, if not a bad bank, what is the alternative strategy that really gets on top of the problems in that bank and goes on being what I want it to be, which is a bank supporting the British economy," Osborne said.
He stressed, however, that the government was not "close to the stage of being able to sell RBS shares".He stressed, however, that the government was not "close to the stage of being able to sell RBS shares".
"RBS was a much more complex bank," he said. "To be fair to management past and present, it was a bank that was in a lot more trouble.""RBS was a much more complex bank," he said. "To be fair to management past and present, it was a bank that was in a lot more trouble."
Osborne also said he was considering offering state-owned shares in Lloyds to the general public.Osborne also said he was considering offering state-owned shares in Lloyds to the general public.
"We are now looking actively at a retail offer for the next tranche of Lloyds shares," he said."We are now looking actively at a retail offer for the next tranche of Lloyds shares," he said.
The chancellor asked investment bank Rothschild to examine whether RBS should be split up in June. The result of that review is due shortly and the Telegraph said the government was understood to be considering three options for dealing with RBS's problem assets.
The paper said the go-ahead for the breakup would be given within the next few weeks, but a Treasury spokesman said early on Saturday that no decision had yet been made.
"As the chancellor has said, the government is currently examining the case for creating a bad bank of the Royal Bank of Scotland's risky assets. That review is ongoing, and will be published in the autumn."
In August, Osborne was put under pressure to go ahead with the hive-off when members of the parliamentary commission on banking standards wrote to him.
In its letter the commission, which is chaired by the Conservative MP Andrew Tyrie, said it was "important for all the options for [RBS's] future structure to be examined as a matter of urgency".
According to the Financial Times, it added: "The chancellor's review also needs to examine whether, over time, the taxpayer may in fact be better off as a result of a split."
RBS reported its new chief executive, Ross McEwan, as saying on Friday that the government review into a possible breakup was distracting executives looking to revive the bank's fortunes.
"The debate you read about in the papers, and that has taken up too much time of the management team, has been about what is now a small proportion of our activity. We are taking responsibility for resolving these debates," McEwan said in a memo to staff.
Osborne also told the Telegraph there was no prospect of selling the government's stake in the bank, bailed out in 2008 at a cost of £45.5bn before the next general election in 2015.
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