RBS avoids break-up with 38 billion pounds 'internal bad bank'

Royal Bank of Scotland (RBS.L) is to create an internal "bad bank" to fence off its riskiest assets, part of a raft of measures designed to heal its relationship with the British government and speed up its eventual privatization. Britain is keen to offload its stakes in RBS and state-backed rival Lloyds Banking Group (LLOY.L) as soon as possible, having pumped a combined 66 billion pounds ($106 billion) into the banks to keep them afloat in the 2008 financial crisis. "I think it does make it easier to sell off the bank and get our money back," Finance Minister George Osborne told the BBC on Friday, adding that a sell-off was unlikely to begin before the next election in 2015. RBS chairman Philip Hampton, who had previously said the bank could be ready for privatization in 2014, said the timescale for privatization may have been pushed back.

via Business News - Yahoo Finance http://finance.yahoo.com/news/rbs-avoids-break-38-billion-171445625.html