Sir Mervyn King has blown open the debate about the future of Royal Bank of Scotland by describing the current situation as “nonsense” and calling for the bailed out bank to be broken up into a good and bad bank.
Less than a week after the Edinburgh-based bank insisted it could be ready for partial privatisation ahead of the May 2015 election, the Bank of England governor laid bare his disagreement with the chancellor, George Osborne, over the future of RBS, saying the state-backed bank could not be sold off until it acknowledges the full scale of its bad debts.
The lender, which is still 72 per cent owned by the taxpayer, has announced that it has taken a provision to settle claims made by the Department of Justice (DoJ), a move that will push it to a huge loss, reports The Telegraph.
It is understood the taxpayer-backed lender is poised to announce a shake-up that will see its markets business split from its international banking division and pave the way for investment banking boss John Hourican to leave, reports The Evening Standard.
The Times reports that bankers have been sounding out investors for the past week about a sale of RBS stock that could begin in the next few days.
The aim is to sell about £2.5 billion, or 6 per cent, of the bank’s shares in the initial sale, with taxpayers set to make a loss.
BP reported a sharp drop in fourth-quarter profits on Tuesday partly due to weakness in its refining business, providing more evidence of difficult times across the “big oil” sector.
BP’s results, hit by tough conditions in U.S. refining and partly offset by strong contributions from its stake in Russia’s Rosneft, highlighted the industry’s struggle to increase profits in the face of rising costs.