LONDON, Oct 24 (Reuters) - Majority British state-owned Royal Bank of Scotland is planning to scale back its involvement in the government's asset protection scheme, media reports said on Saturday.
RBS originally had planned to ring fence about 325 billion pounds ($541.1 billion) of potentially toxic assets under the insurance scheme, but could look to pare it back to 300 billion pounds or even 265 billion pounds, the Financial Times said, citing people familiar with the matter.
The Times, without citing a source, said the bank wants to cut the assets in the scheme by 45 billion pounds.
Under the plan, the government may inject billions of pounds of taxpayers' money into the bank to offset the reduction in assets going into the scheme, the Times added.
A spokesman for RBS declined to comment on the reports.
The bank had been helped by a proportion of its risky loans having expired as well as a general improvement in the wider economy, the FT added.
RBS, which is locked in talks with the Treasury over details of the scheme, may find the smaller pool of assets will not help reduce its fee, as the level of risk of the remaining assets is uncertain, the FT said.
RBS's tentative plan for a cash call was met with lukewarm support this week, with its shares falling 5 percent.
The Times said the Edinburgh-based bank had postponed its rights issue plan.
The British government has so far injected 20 billion pounds into RBS, taking a stake of about 70 percent.
Lloyds Banking Group Plc last week confirmed after weeks of speculation that it may scale back or cancel its participation in the APS.
(Reporting by Avril Ormsby; Editing by Michael Roddy) ($1=.6006 Pound) Keywords: FINANCIAL RBS/ (avril.ormsby@reuters.com ; +44 207 542 1816; Reuters Messaging: avril.ormsby.reuters.com@reuters.net ) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
RBS originally had planned to ring fence about 325 billion pounds ($541.1 billion) of potentially toxic assets under the insurance scheme, but could look to pare it back to 300 billion pounds or even 265 billion pounds, the Financial Times said, citing people familiar with the matter.
The Times, without citing a source, said the bank wants to cut the assets in the scheme by 45 billion pounds.
Under the plan, the government may inject billions of pounds of taxpayers' money into the bank to offset the reduction in assets going into the scheme, the Times added.
A spokesman for RBS declined to comment on the reports.
The bank had been helped by a proportion of its risky loans having expired as well as a general improvement in the wider economy, the FT added.
RBS, which is locked in talks with the Treasury over details of the scheme, may find the smaller pool of assets will not help reduce its fee, as the level of risk of the remaining assets is uncertain, the FT said.
RBS's tentative plan for a cash call was met with lukewarm support this week, with its shares falling 5 percent.
The Times said the Edinburgh-based bank had postponed its rights issue plan.
The British government has so far injected 20 billion pounds into RBS, taking a stake of about 70 percent.
Lloyds Banking Group Plc last week confirmed after weeks of speculation that it may scale back or cancel its participation in the APS.
(Reporting by Avril Ormsby; Editing by Michael Roddy) ($1=.6006 Pound) Keywords: FINANCIAL RBS/ (avril.ormsby@reuters.com ; +44 207 542 1816; Reuters Messaging: avril.ormsby.reuters.com@reuters.net ) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.