Submitted by Fox First at Ten on October 17th
LONDON (AP) - Royal Bank of Scotland, which was rescued in Britain's biggest bank bailout, said Wednesday that it is getting out of an emergency insurance program which helped stabilize the company after it nearly collapsed.
RBS said it has agreed with the U.K. Treasury and the financial regulator that it will leave the Asset Protection Scheme, in which the bank paid 2.5 billion pounds ($4 billion) to insure against losses on 282 billion pounds of bad loans and other risky assets.
Chief Executive Stephen Hester said the development was "a significant milestone" in the bank's recovery.
Royal Bank of Scotland shares were up 1.6 percent at 284.5 pence in early trading in London.
Shares would have to climb about 500 pence for British taxpayers to break even on their 82 percent stake in RBS. The share price sank to a low of 10 pence - equivalent to 100 pence in the redenominated shares issued in June - in February 2009, at the height of the financial crisis.
Gary Greenwood, analyst at Shore Capital, said Wednesday's announcement was not a big surprise as the bank had been signaling its intention to drop out of the insurance program.
The bank suffered a setback last week when Spanish bank Santander backed out of an offer to buy 316 RBS branches. The European Commission ordered the bank to dispose of the branches by the end of next year as a condition for the state bailout.
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