Royal Bank of Scotland Group will sell-off nearly a fifth of its assets to escape the damage being done by its toxic loan book.
The bank, in which the Government has a 68% stake, will divide its business into a profitable core, with problematic subsidiaries and assets placed into a non-core division, often known as a 'bad bank'.
RBS is expected to sell off around £200bn worth of assets, including many of its international operations.
It will sell the Asian and Australian operations acquired as part of 2007's acquisition of ABN Amro, along with parts of its American business. RBS will keep its Churchill and Direct Line insurance arms after failing to find a buyer.
Around 20,000 jobs will be lost as part of the sell-off, with around half expected to be cut in the UK.
Chief executive Stephen Hester has already warned the bank will announce losses and writedowns of £28bn when its annual reports are published on Thursday.
The Treasury is thought to have approved Hester's plan to divide the bank in two, which should provide some protection for the UK taxpayer's investment.
Contact: John Bakie, Tel: 020 7484 9805, e-mail: [email protected]IFAonline
Putting the tech into protection
Square Mile’s series of informal interviews
Fallout from Haywood suspension
Launching later in 2019
£80bn funds under calculation