Britain’s RBS to raise $35 bn under bailout scheme

October 13th, 2008 - 2:48 pm ICT by IANS  

London, Oct 13 (DPA) Britain’s Royal Bank of Scotland (RBS) announced Monday that it will be raising 20 billion pounds ($35 billion) of new capital under a government bail-out scheme.The bank also said that its chief executive, Fred Goodwin, is to stand down following the recent turmoil surrounding the bank which saw its share price fall to 1.71 pence.

The announcement came as the Treasury announced details of its plan to prop up banks to the stock exchange.

HBOS, Halifax Bank of Scotland, is to raise 11.3 billion pounds, while Lloyds is to raise 5.5 billion pounds to strengthen its balance sheet.

The move means effectively that the government will hold a 60-percent stake in RBS, and of 40 percent in HBOS, which is to be merged with Lloyds TSB.

Barclays said it would not draw on the government funds and raise 6.5 billion pounds from shareholders.

Banks and Treasury officials worked through the night to hammer out details of the government aid to banks following the major bail-out package agreed last week.

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