Treasury denies breakup of RBS is imminent after shares in the state-backed bank plunge

 
Tim Wallace
Follow Tim
TREASURY sources yesterday denied the government was about to break up RBS, after reports over the weekend that the future of the bank had been decided.

Bankers are looking into setting up a so-called bad bank with RBS’s worst assets, in a bid to free up the institution to lend more.

The result is not due for some weeks, but reports over the weekend indicated the bad bank would be announced any day now. As a result shares in the bank yesterday plunged 5.26 per cent.

But insiders at the Treasury told City A.M. no decision has been reached, and markets are over- reacting to rumours.

RBS and Treasury spokespeople declined to comment.

Meanwhile RBS sold the last of its money market funds to Goldman Sachs. Global Treasury Funds manages assets totalling £8bn and has 20 staff.

It is another stage in RBS’s drive to exit a range of non-retail banking businesses. The price was not disclosed.