RBS and Lloyds to be broken up
Wed, 04 Nov 2009
Royal Bank of Scotland (RBS) and Lloyds Banking Group are set to sell off hundreds of branches in order to introduce more competition to the sector.
The European Union has demanded the move after the institutions were part-nationalised during the recent banking crisis.
Ministers hope the move will help stimulate consumer activity on the high street, helping the UK to exit recession.
RBS is set to sell 318 branches, while Lloyds is expected to lose over 600 over the next four years.
The latter has also opted out of the government's insurance scheme, instead choosing to raise £21 billion with a £13.5 billion rights issue and a £7.5 billion debt swap.
Both groups will also clamp down on banker remuneration after receiving an additional £30 billion in funding from the government this week.
Board members have agreed to defer bonuses for three years, while only employees who earn over £39,000 per annum will receive additional benefits.
Last month, a group of leading foreign banks agreed to support the implementation of reforms to bankers' pay proposed at the recent G20 summit in Pittsburgh.
Merrill Lynch, Credit Suisse, Goldman Sachs International and JP Morgan were among those that confirmed their commitment to the Financial Services Authority's action on bonus practices.
How Microsoft can help
Microsoft solutions for financial services helps companies succeed by providing the tools people need to gain new insights, make informed decisions, improve customer services, and improve operations. Learn More
Find a Microsoft solution partner
More Financial Services News
View all articles
|
|
|
|
