RBS still in trouble as Lloyds rises

INVESTMENT bank Rothschild is being lined up to advise on a possible break-up of Royal Bank of Scotland...  

RBS is struggling to find its feet and stabilise profits. The move by the Government comes as struggling RBS is set to be divided into a good bank and a bad bank.

 It highlights the contrast between RBS, dogged by uncertainty, and Lloyds Banking Group which is being groomed for re-privatisation at the earliest opportunity. Rothschild’s appointment is likely to be announced and follows last month’s dramatic ousting of RBS chief executive Stephen Hester.

Lloyds, however, is achieving targets and seems ready for re-privatisation

Lloyds is already back making profits, it has cut costs and largely repaired its balance sheet.

A combination of Hester’s departure and the plans for the split suggested by the Parliamentary Commission on Banking Standards have sent shares tumbling in RBS which is 81 per cent owned by taxpayers.

Meanwhile shares in Lloyds, 39 per cent owned by the Government, have risen to a two-year high in response to a turnaround under chief executive Antonio Horta-Osorio. 

Richard Hunter at broker Hargreaves Lansdown said: “Lloyds is already back making profits, it has cut costs and largely repaired its balance sheet. The time seems right for flotation. On RBS it seems it is simply not ready to be floated.”