RBS's loss halves but more bad debts to come

Analysts have highlighted concerns for the bank's Global Banking and Markets arm, which after Tuesday's decision has been ordered not to rise above number five in the global all-debt markets league table for three years, as well as agreeing to cap cash bonuses -- morale-sapping decisions that could make it even harder to retain staff.

RBS has said it would consider a rights issue to refinance part of the government's extra investment.

In a trading statement released alongside Tuesday's shake-up, Lloyds said it continued to expect a loss before tax for 2009 but confirmed that it had seen a reduction in the run-rate of overall impairment provisions in the third quarter, compared to the first half.

(Reporting by Clara Ferreira-Marques and Steve Slater; Editing by Greg Mahlich)