RBS chief executive Fred Goodwin has stepped down with chairman Tom McKillop is to retire, while HBOS’ Andy Hornby and Lord Dennis Stevenson are to also set to step down from their positions as chief exec and chairman respectively.
Terms of the bail-out will see £20bn pumped into RBS, £11.5bn of HBOS and £5.5bn to Lloyds TSB.
The announcement means that taxpayers will own about 60 per cent of RBS and 40 per cent of the merged Lloyds TSB and HBOS.
Stephen Harker is to take on the chief executive role at RBS.
At 9.47am HBOS and RBS where the only two FTSE100 companies to fall, with HBOS down 15 per cent and RBS 3.2 per cent.
The drop in HBOS shares comes as it was revealed that the potential merger with Lloyds TSB is to continue with revised terms, meaning that shareholders are almost to get poorer terms.