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RBS and Lloyds Bank shares jump amid plans to move south


Share prices for RBS and Lloyds Bank jumped today, as they joined a host of other banks who have announced contingency plans to re-register as English companies in the event of a “yes” vote for Scottish independence.

Other banks that have made a similar announcement in recent days include TSB and Clydesdale Bank, who are the owners of Yorkshire Bank.

RBS said that they believe “it would be necessary to re-domicile the bank’s holding company and its primary rated operating entity to England".

They said the reason for their contingency plans was that a vote for independence “could have a bearing on the bank’s credit ratings”.

However, RBS chief executive Ross McEwan allayed any staff fears by stating that RBS would only be legally re-registered as an English entity, and the plan “is not an intention to move operations or jobs”.

Lloyds Bank also released a statement announcing that they were taking a similar approach to RBS. Their statement read: "We have contingency plans in place which include the establishment of new principal legal entities in England."

Both banks saw their shares jump as a direct result of the announcements when markets opened on Wednesday morning. RBS shares increased by over 2pc, whilst Lloyds Bank shares rose by around 1.3pc.

Currency issues

One of the main uncertainties for banks who are registered in Scotland is the currency plan for an independent Scotland.

At the moment there is no clear plan for which currency an independent Scotland would use. The “Yes” campaign had hoped to form a currency union with the UK, but this has been deemed impossible by all three main political parties in the UK, along with the governor of the Bank of England.

It is believed that if an independent Scotland continued using the pound informally, their government would not be able support either RBS or Lloyds Bank in the event of a banking crisis.

Research by Credit Suisse claimed this is because Scottish Bank assets would be 12 times the nations GDP, which is considerably higher than that of Iceland before their banking crisis in 2007.

However, whilst both RBS and Lloyds Bank plans to re-register in England have been welcomed, investors have been warned by Chirantan Barua, an analyst at Bernstein, that such a move could cost each firm around £1bn.

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