INDUSTRY NEWS

RBS shares collapse despite Govt aid

Shares in the Royal Bank of Scotland (RBS) have collapsed despite financial help from the government.

The bank was the centre of the biggest loss in UK corporate history after billions of pounds were swept of its market value.

RBS has agreed to increase lending in return for added investment from the Treasury. However Gordon Brown has said he is "angry" that banks are limiting the amount they lend.

He noted that in return for government support RBS has "an obligation to lend to small businesses and to families in this country".

The government has increased its stake in the bank to 70 per cent, despite RBS saying it could face losses of up to £28 billion.

The Council of Mortgage lenders has welcomed the government’s latest round of financial support.

"It is too soon to assess what impact these interventions may have on lending levels in 2009, but they should be helpful," said director general Michael Coogan.ADNFCR-1329-ID-18983535-ADNFCR

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