The UK government is likely to name Rothschild as the advisor for the potential split of the Royal Bank of Scotland into a good and bad bank, with the FT reporting that the investment bank’s role could be announced as early as this week.
This comes following chancellor George Osborne’s pledge in his Mansion House speech to conduct an “urgent investigation” into whether or not to hive off the bank’s bad loans into a separate state-owned entity.
But even contemplating such a move has sparked controversy, with many saying that it’s too late and that such a move could damage value to the taxpayer. Former chief executive Stephen Hester was among those opposing a split.
If named, Rothschild will have fought off rivals including Deutsche Bank and Merrill Lynch. The Treasury is also expected to find an asset valuation specialist, with likely candidates including BlackRock and Pimco.