RBS

The Government is understood to be considering plans to offload its stakes in Lloyds Banking Group and Royal Bank of Scotland just weeks after the General Election.

The Chancellor has announced new targets for lending for the state-aided banks, Lloyds and Royal Bank of Scotland (RBS).

Royal Bank of Scotland and Lloyds Banking Group will agree to lend up to £100bn to customers this year in a new deal with the Government to help businesses and individuals survive the recession.

Lloyds Banking Group is expecting to make a profit in 2010 after making losses of £6.3bn last year.

Beleaguered RBS is to pay out a pension even larger than Sir Fred Goodwin's controversial £12.3m retirement pot.

Government plans to cut the budget deficit are not ambitious enough, a European Commission report will say on Wednesday.

The FTSE 100 was up 0.65% or 36.43 points to 5,630 early this morning as the rumoured RBS debt restructuring boosts financial stocks.

The City's leading investment banks are falling over themselves to get a slice of the $700m in fees on offer from Prudential's record $21bn rights issue.

Royal Bank of Scotland shares jumped 6.8% in early trading after the bank reported smaller-than-expected annual losses of £3.6bn.

Members of the public may be offered discounted shares in state-owned banks if the Conservatives win the next General Election.