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Treasury may inject further £1.5bn into RBS if bank is split

Treasury may inject further £1.5bn into RBS if bank is split

The Treasury is considering plans to inject another £1.5bn into Royal Bank of Scotland if a review it commissioned recommends the state-backed lender be broken up.

In June, George Osborne said a good bank/bad bank split of RBS would be formally investigated to establish once and for all whether a break-up would “restore our banking system to health” and help “support the economy”.

Rothschild, the corporate adviser, is leading the process and expects to report back in the autumn.

If it urges a split, RBS will need further capital. However, the Chancellor has insisted he is “not prepared to put more taxpayer capital” into the 81pc state-owned bank.

Instead, official sources said the Treasury is looking at options for the “dividend access share”, a mechanism put in place at the time of the 2008 bail-out that makes it prohibitively expensive for RBS to pay dividends to ordinary shareholders.

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