UK unveils RBS, Lloyds shake-up

Both banks, which were bailed out at the height of the global financial crisis, will be required to meet “tough” requirements on staff pay and lending in return for the funds, equivalent to US$49 billion (33 billion euros).

“To promote greater competition in UK banking, and meet EU state aid rules, the banks will... be required to make divestments of significant parts of their businesses over the next four years,” the Treasury said in a statement.

Under the plans, the British government will pump another 25.5 billion pounds into Royal Bank of Scotland. RBS will also place 282 billion pounds of high-risk debts into the government's toxic asset insurance scheme.

The developments will see the government's economic interest in RBS climb to 84 percent and its voting rights rise to 75 percent.

Lloyds meanwhile unveiled plans to raise at least 21 billion pounds of new funds and pay a 2.5-billion-pound fee for avoiding the state's asset protection scheme (APS).

The fundraising includes a record 13.5-billion-pound rights issue — which would represent Britain's biggest-ever sale of new shares to existing shareholders.

The government said it would take part and maintain its 43-percent stake in Lloyds.

“Lloyds will not participate in the APS and instead will raise additional private sector capital and pay a fee to the taxpayer for the implicit protection provided to date,” the Treasury added.

“This will reduce the risk borne by the taxpayer, improving value for money.”

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