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| Version 2 | Version 3 |
|---|---|
| RBS avoids being split into 'good' and 'bad' banks | RBS avoids being split into 'good' and 'bad' banks |
| (35 minutes later) | |
| Royal Bank of Scotland has said it will not split itself into separate so-called good and bad banks. | |
| RBS will create an internal "bad bank", ring-fencing £38bn of bad assets - such as loans it does not expect to have repaid. | |
| The bank remains 81%-owned by the government following a massive bailout at the height of the financial crisis. | The bank remains 81%-owned by the government following a massive bailout at the height of the financial crisis. |
| RBS also announced a pre-tax loss of £634m for the three months to 30 September. | |
| Scandals | |
| A separate report released on Friday into small business lending said the bank was performing badly on lending to small businesses and was not even meeting its own targets for the sector. | |
| RBS also announced it is launching a review into how it serves its individual customers. | |
| Like its fellow banks, RBS has been caught up in the mis-selling of payment protection insurance (PPI) and other banking scandals. | |
| Its latest results state it has set aside another £250m to cover claims from individuals who were sold PPI cover they either did not need or did not qualify to use. | Its latest results state it has set aside another £250m to cover claims from individuals who were sold PPI cover they either did not need or did not qualify to use. |
| In a separate development just ahead of the results, RBS suspended two traders in connection with an investigation into the possible manipulation of foreign exchange rates. | |
| Earlier this year, RBS was fined hundreds of millions of pounds for its involvement in rigging Libor interest rates. | |
| 'More resilient' | |
| The decision to keep the bad assets within the bank, but ring-fenced and managed separately, goes against the advice of the Parliamentary Commission on Banking Standards, which this summer suggested that toxic loans should be removed from RBS and kept in the public sector for the foreseeable future. | |
| Toxic loans - or assets - include loans and mortgages that are not expected to be repaid, as well as more complex investments related to these bad loans. | Toxic loans - or assets - include loans and mortgages that are not expected to be repaid, as well as more complex investments related to these bad loans. |
| The Bank of England said that it welcomed the plans for RBS's future structure, saying: "These actions should create a more resilient institution that is better able to support the real economy without any expectation of further government support." | |
| RBS is still 81%-owned by the taxpayer, but unlike Lloyds, in which part of the taxpayer's stake was sold last month, there are no immediate plans to reduce that investment. | |
| The government bought the shares at the height of the financial crisis at just over 500p a share. | |
| They are currently well below that, at 367p. |