RBS mulls share rights issue

Britain's Royal Bank of Scotland is considering approaching the market for extra money to avoid giving more control to the government, making it the second bank to mull such a move.

RBS, which is 70 per cent owned by taxpayers after being bailed out in the global financial crisis, is preparing to join the government's insurance scheme for toxic assets, the reports said, citing unnamed sources.

But it is also considering a £3 to £4 billion share issue to reduce the stake it would hand the government for joining its Asset Protection Scheme.

RBS chief executive Stephen Hester is still "putting out feelers" to its shareholders about a "modest-sized" share issue, The Financial Times reported on its website.

"RBS are looking to gauge investor appetite for a small, modest equity issue," a source was quoted as saying.

RBS could put £325 billion worth of toxic assets into the scheme, which provides guarantees for risky assets, and would have to issue £19 billion of non-voting shares to the government as a fee, the newspaper said.