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Saturday 23 August 2014

British government drafts in BlackRock to advise on RBS split

Gavin Finch and Colm Kelpie

Published 13/07/2013 | 05:00

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Ulster Bank head offices on George’s Quay, Dublin

THE British government has hired asset management firm BlackRock to assess the value of Royal Bank of Scotland's assets as the Treasury reviews a potential break-up of the bailed-out British lender.

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BlackRock Solutions will work with Rothschild and Slaughter & May LLP to help the government decide whether it should split up Edinburgh-based RBS, the Treasury has said in a statement.

STRESS TEST

It will mean that Ulster Bank, RBS's Irish subsidiary, will also be assessed in the informal stress test.

The lender was not part of the stress tests carried out by BlackRock on Allied Irish Banks, Bank of Ireland and Permanent TSB in 2011.

Chancellor of the Exchequer George Osborne said last month he was "urgently" investigating the case for hiving off RBS's toxic assets into a bad bank because the lender was weighed down by too many toxic assets.

The British government owns 81pc of the troubled lender almost five years after giving it a £45.5bn (€52.6bn) bailout, the costliest in banking history.

RBS shares still trade below the level at which taxpayers would break even on their investment.

In its "swift" review, the Treasury will particularly be examining RBS's Ulster Bank and UK commercial property assets, Mr Osborne said last month.

The chancellor said he would decide on the break-up in the autumn.

Irish Independent

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