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LONDON - Britain announced plans on Tuesday to break up state-rescued banks RBS and LBG to address EU competition concerns, and pump about 30 billion pounds (49 billion US dollars) into the pair.
"To promote greater competition in UK banking, and meet EU state aid rules, the banks will... be required to make divestments of significant parts of their businesses over the next four years," the Treasury said in a statement.
Under the plans, the British government will pump another 25.5 billion pounds into Royal Bank of Scotland.
RBS also said it would place 282 billion pounds of high-risk debts into the government's toxic asset insurance scheme.
The developments will see the government's economic interest in RBS climb to 84 percent and its voting rights rise to 75 percent.
Lloyds Banking Group meanwhile unveiled plans to raise at least 21 billion pounds of new funds and pay a 2.5 billion pound fee for avoiding the state toxic asset plan.
The government, which said it will participate in the fundraising, will retain a 43-percent stake in Lloyds.
"Lloyds will not participate in the APS and instead will raise additional private sector capital and pay a fee to the taxpayer for the implicit protection provided to date," the Treasury added.
"This will reduce the risk borne by the taxpayer, improving value for money."
RBS said in a separate statement that it would sell its RBS branches in England and Wales, and NatWest branches in Scotland, as well as its Churchill and Direct Line insurance division and parts of its investment banking arm.
Lloyds Banking Group added that it would offload its Lloyds branches in Scotland, its Cheltenham & Gloucester branches, and the Intelligent Finance online business.
The Treasury added that it had reached agreement "in principle" with EU Competition Commissioner Neelie Kroes over the restructuring.
- AFP/ir
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