RBS in talks over toxic scheme exit

21st Jan 2011 08:47

Royal Bank of Scotland is in early stage talks over an exit from the government's toxic asset scheme, possibly even as soon as the end of this year.Stephen Hester, the bank's chief executive, had previously said that 2012 would be the earliest RBS could pull out, but both sides are now said to want to end the arrangement so an earlier date is now possible.RBS agreed to pay £2.5bn to cover £280bn of potential toxic loans when it was in danger of going bust, but with RBS's loan book now down to £205bn and the first £60bn to be paid for by the bank anyway, analysts say it is unnecessary and costly insurance as it will never be needed. For the government, it will be easier to dispose of the 84% stake the taxpayer owns in the bank if it is out of the scheme, analysts say.