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RBS pledges to boost lending by £9bn this year

The Royal Bank of Scotland has promised to boost mortgage lending by £9bn this year in exchange for its participation in the Treasury’s Asset Protection Scheme.

RBS will siphon £325bn of toxic assets into the scheme and receive an extra £13bn from the government to boost its core Tier 1 capital.

In return, RBS has committed to £25bn of new lending, with £9bn for mortgage lending and the remaining £16bn for business lending. A further £25bn in lending has also been promised for 2010.

This has been agreed against a backdrop of record losses of £24.1bn for RBS – the biggest in corporate history. As part of its involvement in the scheme RBS will bear losses of up to £19.5bn on assets placed in the scheme. Losses incurred over £19.5bn will be borne 90% by the Treasury and 10% by RBS.

The scheme will only apply to losses incurred after January 1 2009.

RBS will have to pay the Treasury a fee of £6.5bn to participate in the scheme. The government has also increased its stake in RBS by £13bn, meaning taxpayers now own a whopping 83% of RBS.

Stephen Hester, chief executive of RBS Group, says: “Participation in this scheme would help us reduce risk for our shareholders while providing support for our customers via increased lending.


Regulator costs us a fortune but lets banks off lightly

From time to time Mortgage Strategy publishes readers’ letters that refer to the FSA. In almost all cases the writers prefer to remain anonymous, presumably to avoid the ire of the regulator. I too fall into this category.

Go figure…

When is bad news good news? When the news is better than predicted.

Yorkshire reports pre-tax profit of £8.3m

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DB transfer showstoppers

By Jim Grant, Senior Product Insight & Technical Support Analyst Transfers from defined benefit (DB) schemes are a bit of a hot topic just now. In this article we look at a couple of factors that could prevent a transfer from happening Equalisation of pensions Prior to the Barber case in 1990, DB pension schemes typically provided […]


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