Dec. 16 (Bloomberg) -- Royal Bank of Scotland Group Plc said it will exit an agreement that would have seen the U.K. inject 8 billion pounds ($13 billion) into the bank if its core Tier 1 capital ratio fell below 5 percent.
The bank is leaving the government’s Contingent Capital Facility a year ahead of plan, saving it about 320 million pounds a year, RBS said in a statement today.
“The group has been able to cancel the CCF in light of the recent actions announced to further strengthen its capital position,” RBS said in the statement. RBS’s core Tier 1 ratio, a measure of financial strength, increased to 11.6 percent in the third quarter. That’s more than double its 5.5 percent level in the three months through September 2009.
RBS entered into the CCF after it needed a 45.5 billion-pound taxpayer rescue during the banking crisis, the biggest ever bank bailout. The Edinburgh-based lender has bolstered its capital levels since then by selling assets and shrinking its balance sheet.
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