The Royal Bank of Scotland Group PLC is exiting United Kingdom’s “Asset Protection Scheme” on Thursday, Oct. 18, four years after the British government initiated a $70 billion-plus bailout in the financial crisis.
RBS is based in Edinburgh, Scotland and has its U.S. headquarters in Stamford, where it is one of the city’s largest employers. Its retail banking subsidiary RBS Citizens has its main office in Providence, R.I.
Since the eve of the 2008 market collapse, Connecticut deposits at RBS Citizens are down 9 percent to below $2.6 billion, despite an overall 6 percent increase in U.S. deposits according to the Federal Deposit Insurance Corp.
RBS stated it paid $4 billion to participate in the Asset Protection Scheme, which gave it “backstop credit insurance” in the bank’s words on assets valued at $372 billion at the time, with the bank already working to cut its exposure to derivatives and other risks. Today, RBS assets total $170 billion.
RBS paid an additional $2.4 billion for liquidity support it received during the financial crisis of 2008.
“We all want a system in which banks will never again need to seek credit support from government in a financial crisis,” said Stephen Hester, RBS chief executive, in a prepared statement. “The APS has played a valuable role, buying time for the bank as we implemented change from the worrying days of 2009 to create the much stronger institution it is today. RBS’s capital, liquidity, and funding positions have been transformed in the past three years, so the time is now right for us to exit this scheme.”
