Page last updated at 04:03 GMT, Sunday, 22 February 2009

RBS to sell off fifth of business

Royal Bank of Scotland's London office
RBS will announce its annual results on Thursday

The Royal Bank of Scotland (RBS) is to announce plans this week to sell off at least a fifth of its business, including much of its toxic debt.

New chief executive Stephen Hester will place the parts he wants to sell into a separate, non-core division.

The move, which aims to protect the profitable core of the bank, is expected to hit jobs - with RBS staff braced for cuts of between 10% and 20%.

The government has a stake of 68% in RBS after a 20bn bail-out last year.

With its annual results out on Thursday, the lender needs to persuade its shareholders, notably the British public, it has a credible recovery plan for the next three to five years.

Bonuses limited

Mr Hester has already warned the market to expect 28bn in losses and write-downs.

With more than a trillion pounds of assets on his books, he has identified between 200bn and 300bn-worth of business as non-core and up for sale.

This includes some elements of the American business, and it will also retreat from much of the Asian operation it bought at the height of the boom in 2007 as part of Dutch giant ABN Amro.

Earlier this month, Chancellor Alistair Darling announced the government was limiting bonuses paid out to staff by RBS.

Mr Darling said bonuses at the bank would be cut from the 2.5bn paid last year to 340m.

Mr Hester became chief executive of RBS last year after the departure of Sir Fred Goodwin following the government's bail-out of the bank.

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