Royal Bank of Scotland (RBS) has agreed a deal with the British government to exit the administration's Asset Protection Scheme (APS).
Effective from today (18 October), this decision provides evidence that the financier - which is 82 per cent state-owned - has made progress towards stabilization in the wake of the global banking crisis and represents a big step towards re-privatization.
The APS is the scheme through which the Treasury provided credit insurance for some of RBS's assets and derivatives exposures and the bank's exit has come at the earliest date in line with its minimum contractual fee.
In total, RBS will have paid some £2.5 billion ($4 billion) to participate in the mechanism and the financier noted its decision to remove this safety net shows its balance sheet has become "more conservative, resilient and sustainable".
Stephen Hester, RBS chief executive, said exiting the APS is a "significant milestone" in the bank's recovery.
By Gary Cooper