Royal Bank of Scotland Group Plc will next week have paid the government 2.5 billion pounds ($4 billion) in fees for using the Asset Protection Scheme, the minimum required before the lender can stop using the aid program, according to a person briefed on the talks.
RBS, Britain’s biggest publicly owned lender, was in 2009 the only bank to join the program, which provided insurance for losses on 282 billion pounds of its most toxic loans. The bank has never had to draw on the policy, for which it pays the government a fee, and has reduced the amount of loans it covers to 112 billion pounds.
Leaving the APS removes another obstacle to the 81 percent government-owned lender’s return to private ownership. Chief Executive Officer Stephen Hester has cut assets by more than 800 billion pounds, eliminated 36,000 jobs and scaled back RBS’s securities and Irish units since he took over from Fred Goodwin when the bank was rescued in 2008.
Hester has previously said the lender will leave the APS at the earliest opportunity. Any exit from the program must still be approved by the U.K.’s Financial Services Authority.
The Wall Street Journal reported earlier today that RBS may exit the APS next week. A Treasury spokesman denied the report. RBS officials in London declined to comment. FSA spokeswoman Kirsty Clay wasn’t immediately available to comment.
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