On Friday, the Royal Bank of Scotland said it would be separating its GBP38 billion or USD61 billion worth of bad loans into an internal entity in efforts to return bailout money it had received from the British government. RBS received a total of over GBP45 billion in bailout money.
According to the The New York Times' The DealBook, the decision came after the UK government requested for a review of the bank four months ago. The review would study RBS' option to break up. The message, The DealBook said, was a clear indication that RBS was against the breakup option.
The bad loans included Ireland property loans. RBS had planned to exit 70% of its current portfolio within the next two years. RBS also estimated that it would incur up to GBP4.5 billion in impairment losses as it would be expecting to sell its assets at discounted prices.
RBS also disclosed its plans to focus on retail and commercial banking at home, and planned to move the public listing of Citizens Financial Group in the US to next year.
RBS Chief executive Ross McEwan said, "We are a bank with a significant international reach but the U.K. is our home."
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