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26th Feb 2009
RBS commits £25bn to new lending
RBS commits £25bn to new lending
The Royal Bank of Scotland has pledged £25bn to new lending as it injects £325bn of dodgy assets into the Treasury's Asset Protection Scheme.
RBS will have to stump up the money to cover the first £19.5bn of losses, but after that any further losses will be 90% covered by the Treasury and 10% by RBS. It will pay £6.5bn to participate in the scheme.
By participating in the scheme, RBS has also agreed to increase its lending to the tune of £25bn over the next 12 months to UK homeowners and businesses who meet RBS' normal credit and pricing criteria.
The increased lending will be split £9bn to mortgage lending and the remaining £16bn to business lending.
A further £25 billion increase is targeted in 2010.
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