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Royal Bank of Scotland caps lending in Russia

AFP

RBS is 81-percent state-owned after it was bailed out during the 2008 financial crisisRBS is 81-percent state-owned after it was bailed out during the 2008 financial crisis

RBS is 81-percent state-owned after it was bailed out during the 2008 financial crisisRBS is 81-percent state-owned after it was bailed out during the 2008 financial crisis

Britain's state-rescued Royal Bank of Scotland has capped lending in Russia after the imposition this week of new economic sanctions against Moscow linked to the Ukraine crisis, it announced Friday.

"Following developments in Ukraine, ratings were reviewed, limits adjusted and additional credit restrictions placed on new business," RBS said in a statement, adding it was also reviewing its exposure to international sanctions.

RBS revealed that it slashed the group's lending to Russia by £100 million ($168 million, 126 million euros) to £1.8 billion in the first half of 2014.

That included £900 million of corporate lending and £600 million of lending to banks, the areas targeted by sanctions.

The statement was published one day after the European Union formally adopted broad economic sanctions against Russia, hoping they will force Moscow to reverse course on the Ukraine crisis.

The new measures, finally agreed earlier this week after months of hesitation, target Russia's banking, defence and energy sectors in view of its "actions destabilising the situation in eastern Ukraine," an EU statement said.

Five banks were named, among them the largest in Russia: Sberbank, VTB, Gazprombank, VEB and Rosselkhozbank.

RBS last week revealed that its net profits almost tripled to £1.43 billion in the six months to the end of June, as the group pressed ahead with its ongoing radical restructuring.

Pre-tax profits meanwhile jumped 93 percent to £2.65 billion from a year earlier.

The Edinburgh-based bank is 81-percent state-owned after it was rescued with £45.5 billion of British taxpayers' cash during the 2008 global financial crisis, making it the world's biggest-ever banking bailout.

Date created : 2014-08-01