Royal Bank of Scotland will hand restructuring chief Rory Cullinan the task of overseeing another major scaling back of its investment bank, sources told Reuters, allowing it to focus on lending to British households and businesses.

RBS in earlier disposal of toxic assets

Royal Bank of Scotland could create an internal bad bank to house more of its problem loans, even if Britain decides not to enforce a breakup of the part-nationalised lender, banking industry and political sources say.