UK: Chancellor ‘urged to split RBS bank’
- Credit: PA
Chancellor George Osborne is reportedly set to face calls from a high-powered commission of MPs and Lords to split Royal Bank of Scotland into a good bank and a bad bank.
A draft copy of a report from the Parliamentary Commission on Banking Standards has recommended breaking up the taxpayer-backed lender, according to the BBC.
It is understood the draft version of the highly-anticipated report from the commission was sent to its members in the last week and they have until Monday to read it through, with a final report due by the end of the month.
The recommendation to split RBS would be awkward for Mr Osborne, given the pressure to start recouping taxpayer cash in the part-nationalised banks before the 2015 election.
It is thought Mr Osborne and Prime Minister David Cameron are not keen on a break-up of RBS, which could delay returning it to the private sector and may be seen as a second state bailout of the banking giant.
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RBS itself has claimed it is well on the road to recovery, despite reporting losses of £5.2 billion for 2012, driven by a £390 million settlement for rate-fixing, £1.1 billion provision for mis-selling and IT glitches.
Sir Philip Hampton, chairman of the 81% state-owned bank, said on presenting full-year results that the institution’s recovery would be “substantially complete” by the middle of 2014, paving the way for its return to the private sector.
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But outgoing Bank of England governor Sir Mervyn King has also said he believed RBS should be broken up in an attack on the handling of the bank’s future in a parliamentary hearing in March.