Calls for Royal Bank to be restructured as losses hit £2.5bn

CALLS have been made to break up the Royal Bank of Scotland after it admitted £2.5 billion had been lost so far this year.

Liberal Democrat Treasury spokesman Susan Kramer said the publicly-owned bank, which announced losses of £469 million in the last three months, should be restructured.

Royal Bank of Scotland (RBS) said that while the economy appeared to be holding up there was “uncertainty” over the future as it revealed it had seen a fall in mortgage applications, but those had now stabilised.

The bank was also forced to admit that it would miss next year’s deadline to sell off its Williams & Glyn branch network after RBS was bailed out by the taxpayer to the tune of £46bn at the height of the financial crisis in 2008.

Ms Kramer said it was “time for the Government to face reality”. She added: “We cannot keep holding RBS on our books indefinitely in the hope of a magical turnaround in its fortunes.

“The Government must useitsstakeinRBStorestructure the bank and create a new regional and community banking sector.

“Doing so would provide real help to small local businesses and ensure that taxpayers’ funding of the bank delivers lasting value to the real economy.”

As part of EU rules governing its bailout conditions, RBS was told to offload its Williams & Glyn branches by the end of 2017.

But the bank said that, despite “positive discussions” with potential buyers, it will miss that deadline.

In a statement, the bank added: “RBS is therefore in discussions with HM Treasury, and expects further engagement with the European Commission, to agree a solution with regards to its state aid obligations.”

RBS made an operating profit of £1.3bn, up from £826m the previous year. But it was hit by a multitude of restructuring and litigation costs.