RBS reportedly may exit state protection deal
LONDON (MarketWatch) — Shares in Royal Bank of Scotland Group rose 5% in early trading Friday after the Financial Times reported that it is in talks with the U.K. Treasury over a plan to exit the government’s asset protection scheme earlier than expected. The bank’s CEO Stephen Hester has previously said that 2012 is the earliest exit date from the APS, but two people involved in the talks said it was likely the bank would now leave it by the end of this year, the newspaper reported. The APS is effectively an insurance policy to cover losses on a portfolio of risky assets, but only if those losses exceed 60 billion pounds ($96 billion) — which is seen as unlikely. If RBS were to exit the APS in 2011 it would have paid a total of 2.5 billion pounds in charges for the APS, but if it remains in the scheme into 2012 it will pay at least an extra 100 million pounds, the FT reported. It added that some of the highest risk assets, such as its loans in Ireland, would not be covered by the APS anyway.
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