RBS to create new internal bad bank to house problem loans


LONDON, Nov 1 (Reuters) - Royal Bank of Scotland said on Friday it would create an internal "bad bank" to managethe run-down of its riskiest assets after the government stoppedshort of ordering a full break up.

RBS said it would place 38 billion pounds ($61.05 billion)worth of assets into a new 'Capital Resolution Division' nextyear.

RBS said the internal restructuring would free up between 10billion pounds and 11 billion pounds of capital, leaving itbetter placed to lend.

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