Royal Bank of Scotland is this week poised to unveil a dramatic restructuring in which assets worth several hundred billion pounds will be put up for sale.
Stephen Hester, RBS’s new chief executive, will trigger the dismantling of the empire assembled by his predecessor Sir Fred Goodwin by creating a non-core subsidiary into which about £300 billion of unwanted assets will be placed.
The aim is to isolate the troubled areas of the business into a “bad bank” and allow the stock market to place a value on the remaining core operations.
The plan is due to be unveiled on Thursday, at the same time as RBS announces Britain’s biggest corporate loss of up to £28 billion, with cost cuts worth about £1 billion a year.
Reports this weekend said as many as 20,000 jobs could go, equivalent to about ten per cent of the global workforce, in addition to thousands of posts already axed.
Reports said assets and businesses due to be placed in the non-core division will include Asian and Australian units acquired as part of RBS’s ABN Amro acquisition in 2007.