RBS advised to sell US business

24 October 2012

Royal Bank of Scotland (RBS) has been urged to reduce its level of involvement in the US banking industry.

Jim O'Neil - chief executive of UK Financial Investments (UKFI), the body that oversees the government's 82 per cent holding in RBS - has called on the major lender to take a close look at the future of its American business Citizens.

Speaking to the Parliamentary Commission on Banking Standards yesterday (23 October), Mr O'Neil said the UKFI has already discussed the financier's "US operations and the investment bank" with senior officials at RBS.

"The investment bank shape and size ultimately should be smaller than it is today," he added.

It is estimated that Citizens - which employs 20,900 members of staff in more than 1,500 branches across the US - would be worth around $14 billion if RBS decided to sell up.

This comes after it emerged earlier this month that RBS had taken a step towards re-privatization by agreeing a deal to withdraw from the government's Asset Protection Scheme.

By Claire Archer

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