RBS protects itself against collapse of sterling after Brexit

RBS’ chairman Sir Howard Davies told BBC Radio 4’s Today programme the bank sought to protect itself to prevent a forthcoming fine from America being more costly if the US dollar strengthened against the falling pound.

Sir Howard said: "I can't tell you for how much, but yes we did notice that, and we bought some protection".

The bank is expecting to pay a fine of about £9bn for its role in the 2007 housing market collapse in the US.

Since the UK voted to leave the European Union on 24 June, the pound has plunged to 31-year record lows from $1.50 to about $1.29 on Wednesday. The fall in rates between means the bank could save about £900m from the forthcoming fine.

Sir Howard also said in comparison to the financial crisis in 2008, RBS was willing to lend.

"The market thinks there is going to be a slowdown in the UK economy, and if you are a big domestic bank you can't hide from what's going on.

"Last time the situation was that demand for credit, but so was supply, because the banks had to build up their reserves. That is not the case this time round. We are not capital-constrained and we are able to lend."

In June the government reportedly shelved plans to sell its remaining stocks in the bank, as it wanted a better rate for tax payers. The state owns 73% of RBS after the bank received a £45bn bailout in 2008. Sir Howard said it was “realistic” that the government would delay selling.

Shares in RBS fell 4.67% to 151.2p at 1238 BST.