c.2013 New York Times News Service

c.2013 New York Times News Service

LONDON — A little more than five years after being bailed out in the world’s biggest bank rescue, the Royal Bank of Scotland announced Friday a plan aimed at speeding up its overhaul, returning money to taxpayers and making the company profitable.

The bank, which is principally owned by the British government after a 45 billion pound bailout, said that it would separate about 38 billion pounds ($61 billion) of toxic assets into a separate entity within the bank. The creation of the “internal bad bank” came after the government had asked for a review four months ago into whether RBS should be split up; it opted against a breakup.

Royal Bank of Scotland also said it would focus on retail and commercial banking in its home market, Britain, and would move up an initial public offering of the Citizens Financial Group in the United States to next year.

Pressure was growing from the government for the bank to speed up the sale of its troubled loan portfolio.

RBS plans to sell up to 70 percent of the portfolio over the next two years and the rest a year later. But because this would probably involve selling the assets at a steep discount, RBS said it expected impairment losses of up to 4.5 billion pounds for the final three months of this year, and to report a loss for this year.

Shares of RBS continue to trade well below the threshold at which the government would be able to sell its 81 percent stake at a profit. The government would make money once the shares trade above 4.4 pounds a share.

Shares in RBS closed down 7.5 percent Friday, at 3.4 pounds, on concerns that investors would lose out on the new plan.

RBS also said Friday that its net loss for the third quarter was 828 million pounds, compared with a loss of 1.41 billion pounds in the year-earlier period. The results fell short of some analysts’ expectations, which predicted the bank would be profitable in the period. Impairment losses in the quarter were almost unchanged at 1.17 billion pounds.

RBS said it planned to sell an initial stake in Citizens, the U.S. lender it bought in 1988, in an IPO in the second half of next year. That is almost a year earlier than originally planned. RBS said it would sell the rest of Citizens by the end of 2016.