BREAK-up plans for part-nationalised Royal Bank of Scotland and Lloyds Banking Group to appease European competition fears were confirmed today.
RBS is selling RBS-branded branches in England and Wales, its NatWest branches in Scotland, the Churchill and Direct Line insurance arm and parts of its investment banking business as the price of state support.
Lloyds Banking Group will offload its Lloyds branches in Scotland, its Cheltenham & Gloucester branches, and the Intelligent Finance online business.
RBS confirmed plans to place £282 billion in toxic debts into a taxpayer-backed insurance scheme, taking the Treasury’s stake to 84%. Lloyds is avoiding the scheme after announcing £21 billion fundraising plans.
The Government will pump in around £30 billion more into the two banks under the proposals.
The Treasury said both banks would be required to meet ``tough conditions'' on pay and lending.
Existing commitments to make £39 billion available for homeowners and borrowers will remain in place "to translate into increased lending in the economy".
Meanwhile, bonuses for executive directors due this year will be deferred until 2012, while no discretionary cash bonuses for any staff earning more than £39,000 will be paid this year.
