Shares in RBS on the slide as Andrew Tyrie renews call for bank to be split

Shares in Royal Bank of Scotland fell 4 per cent yesterday after the chairman of the Parliamentary Commission on Banking Standards again called for the taxpayer-owned bank to be split up.

The MP Andrew Tyrie said: "We argued that it was important for all options for its future structure to be examined as a matter of urgency before any decisions were taken, including the so-called good bank/bad bank split."

That split has been supported by the former Bank of England Governor, Lord King, and the former Chancellor and commission member, Lord Lawson.

The Treasury is investigating whether splitting up RBS would speed its recovery, increase its ability to lend and, ultimately, improve prospects for selling the taxpayers' 82 per cent stake.

But James Chappell, a banking analyst at Berenberg, said the intervention was unhelpful. "The political meddling continues to make RBS uninvestable," he said. "RBS has already split the business into core/non-core once – it is unclear what can be achieved doing this again."

Mr Tyrie, in a letter to the Financial Times, said he welcomed the Treasury's examination of the options and that "no obstacles should be put in the way of a full examination of all aspects of such a split".

He added: "Formal accounting conventions should not be allowed to get in the way of what is best for the economy in general and the SME sector, for whom bank finance is particularly important."