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UK expected to prop up Lloyds, RBS


By Reuters

The UK government is to guarantee £600 billion (Dh3.1trn) of toxic bank assets to help stabilise Royal Bank of Scotland and Lloyds Banking Group, The Times said on Thursday.

Analysts had expected RBS to place up to £250 billion of its toxic assets into the scheme, which is expected to be unveiled on Thursday when the bank is forecast to report the largest loss in British corporate history.

Lloyds was also planning to put about £250 billion of investments into the insurance plan, the BBC reported on Monday without citing sources.

But The Times said the government had urged both banks to put more assets into the scheme so that they would have enough stability to restructure.

A source close to the negotiations told the newspaper: "We told them it would be erring on the side of caution to go for a higher figure. We do not want them coming back for more."

Finance Minister Alistair Darling will announce he is guaranteeing more than £300 billion of RBS' assets on Thursday, and between £250 billion and £300 billion of Lloyds' assets when it announces results on Friday, the newspaper said.