Royal Bank of Scotland came a step closer to full-scale nationalisation today as the bank unveiled a record £24.1 billion loss and plans to raise up to £25.5 billion from the taxpayer.
The firm – already 70% state-owned – is raising the extra funds to strengthen its balance sheet and insure around £325 billion in toxic debts.
RBS will issue £13 billion in special ‘B’ shares to the Government, as well as a further £6.5 billion to take part in the Treasury’s Asset Protection Scheme. It can also call on a further £6 billion if necessary.
RBS has already taken £20 billion in public funds.
Huge job losses seem certain
While the Government’s shareholding in terms of votes will be capped at 75%, its economic interest in RBS – its claim on RBS’s assets – could rise to 95% depending on its future performance.
Chief executive Stephen Hester said: “The economic stake could be anywhere from 75% frankly all the way up to 95%.”
Mr Hester also gave a strong signal that tens of thousands of job losses are on the way at the beleaguered bank.
He said he “wouldn’t dissent” from reports that as many as 20,000 jobs could be lost.
Visit our guide for more on the nationalisation of RBS.
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