Part-nationalised Royal Bank of Scotland has said it is to create an “internal bad bank”.
That would hold 38 billion pounds (45 billion euros) worth of its riskiest assets – loans that are unlikely to be repaid and would eventually be written off.
It is part of plans to sell the 81 percent of the bank that is held by the British government after RBS was bailed out with taxpayer money.
The bank’s shares fell on Friday, and critics – including a major RBS investor – dismissed it as a “cosmetic exercise”.
The privatisation is still a long way off if it happened now the UK government would be 14 billion pounds (16 billion euros) out of pocket.
RBS is still losing money 634 million pounds (750 million euros) though the pace of losses is slowing.