RBS closes the door on new credit cards

ROYAL Bank of Scotland (RBS) has closed its credit card business to new customers in a bid to prevent a rise in bad debts.<br /><br />The lender, which is 70 per cent owned by the taxpayer, will limit new credit cards to existing banking customers, meaning that anyone who wants an RBS or NatWest credit card will have to open a current account first.<br /><br />A spokesman for the bank said it was &ldquo;focussing where we can on helping our current account customers, savers and mortgage borrowers&rdquo; and pointed out that other banks had taken similar steps.<br /><br />The move is understood to be an effort to reduce the bank&rsquo;s risk profile as chief executive Stephen Hester struggles to turn its fortunes around.<br /><br />The bank is also nearing a &pound;4bn share placing that would allow it to reduce participation in the government&rsquo;s asset protection scheme (APS).<br /><br />Hester has been sounding out investors over a &ldquo;modest&rdquo; share placing that could be unveiled within days.<br /><br />The bank is in talks with the Treasury over the final details of the APS which, in its current guise, would see it pay &pound;19.5bn to the government in non-voting &lsquo;B&rsquo; shares, to insure &pound;325bn of risky loans.<br /><br />A capital-raising exercise would help RBS pay for part of the scheme in cash, preventing the taxpayer&rsquo;s stake from rising to 84 per cent, as would be inevitable under the existing agreement.<br /><br />Hester is also trying to raise funds by disposing of non-core assets, including parts of RBS Asia.<br /><br />Standard Chartered walked away from a deal for assets in China, India and Malaysia at the weekend over the $200m (&pound;125m) asking price, although HSBC and Australia and New Zealand Group are understood to remain in the running.