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£37bn bail-out deal for three banks

Oct 13 2008

A dramatic rescue of British banking is under way after the Government unveiled a £37 billion bail-out for three of Britain's biggest banks.

Royal Bank of Scotland (RBS) is to raise £20 billion of new capital through a Government-guaranteed £15 billion share issue and a £5 billion Government cash injection.

Lloyds TSB is also to raise £5.5 billion of new capital, and said it was revising the terms of its acquisition of rival HBOS.

As part of the unprecedented deal, RBS's under-fire boss Sir Fred Goodwin, who asked investors for £12 billion earlier this year to help shore up the group's balance sheet, is also to step down.