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RBS in ring-fencing revamp

Friday, September 30, 2016 - 01:43

RBS announces a sweeping overhaul of its structure and brands as it outlines plans to separate its retail operations from riskier parts of its business by 2019. As Hayley Platt reports, the government-ordered ring-fencing initiative aims to avoid a repeat of the 2008 financial crisis for the largely state-owned bank.

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Royal Bank of Scotland is renaming and revamping its investment bank. The 73 percent state-backed lender says NatWest will become its main customer-facing brand. Its historic RBS retail brand will largely only be used in Scotland. It's part of the bank's plans to comply with the government's so-called 'ringfencing' regulations - designed to prevent a repeat of the 2008 financial crisis. (SOUNDBITE) (English) INDEPENDENT MARKET ANALYST, JEREMY BATSTONE-CARR, SAYING: "Anything that differentiates and separates and ultimately ringfences investment bank activities and poor retail activities is to be applauded." A new holding company will be created for the ringfenced banks. NatWest Holdings will comprise NatWest, Coutts and two of its Ulster bank divisions. Big global corporate customers and most investment banking activities will be held in a separate entity. But is it enough to protect the bank and the taxpayer in the future? (SOUNDBITE) (English) INDEPENDENT MARKET ANALYST, JEREMY BATSTONE-CARR, SAYING: "Were a systemic event to take place elsewhere in the euro zone or elsewhere, it would be very hard for the UK banking sector and the Royal Bank of Scotland to withstand that altogether. None-the-less we have to take the authorities at their word and at this present time the authorities word is that the UK banking sector would be able to manage such a crisis." Other banks have been getting their houses in order too. HSBC has outlined similar plans. While Barclays has already carved its business into two core divisions, to comply with the new rules, including Barclays UK. ///

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RBS in ring-fencing revamp

Friday, September 30, 2016 - 01:43