RBS break-up ‘totally inappropriate’

Sir George Mathewson said banks needed instead to concentrate on re-establishing trust with customers and small businesses in the wake of the financial crisis.

Business Secretary Vince Cable has suggested that majority state-owned RBS should be split up with part of it being turned into a “British business bank”.

In a leaked letter to David Cameron and Nick Clegg, Mr Cable said it should be given a clean balance sheet and “a mandate to expand lending rapidly to sound business”.

But Sir George, predecessor to disgraced former RBS chief executive Fred Goodwin, told the BBC Radio 4 Today programme: “I think that would be totally inappropriate.

“I do think that to break up the major provider of funds to our existing small businesses is not the correct way to react to this issue.

“I think we should all work harder at getting the relationship correct between bankers and the customers.”