Royal Bank of Scotland (RBS) has agreed to enter into the UK government’s asset protection scheme that allows £240 billion of its toxic assets including corporate and real estate loans to be insured, reported The Financial Times.
The Edinburgh-based bank has also agreed to a minor change to the penalty that it had to pay if it failed to cut down its balance sheet by the amount set by the European Commission before 2013.
As per the agreement, RBS will issue new preference shares of worth GBP25.5 billion to the government and could request a further GBP8 billion of funding in certain situations.
RBS has finalised the terms of the insurance scheme and is set to enter into the agreement next month, if its shareholders vote in favour of the plan, reported the newspaper.
Reportedly, the 70% state owned bank received GBP20 billion of capital from the UK in 2008 after reporting the biggest loss in the UK corporate history.
