Rothschild set to advise UK government on RBS

2 July 2013

The UK government is expected to ask Rothschild to advise it on separating the Royal Bank of Scotland in two.

The independent financial advisory group is expected to have its role announced later this week with it commencing its review immediately, the Financial Times reports.

According to the Parliamentary Commission on Banking Standards, the UK should consider breaking up the troubled company, removing its worst assets into a 'bad bank'

Chancellor George Osborne has previously said he opposes such a move, partly because a full nationalisation of RBS would cost billions of pounds, all of which would come from public money.

RBS was bailed-out after the financial crisis and is now majority-owned by the state. It is moving towards a return to the private sector and officials within the bank have said it could happen as soon as 2014.

However, it is currently struggling to find a buyer for its branches, which must be sold as part of the bail-out agreement.

By Claire Archer

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