Royal Bank of Scotland (RBS) is planning to exit the government’s Asset Protection Scheme (APS), Financial Times reports. The lender is in talks with the Treasury to leave the scheme earlier than expected.

The Edinburgh-based bank was previously planning to exit the scheme by 2012, but may now exit by the end of 2011. The scheme, for which RBS pays a £700 million a-year insurance premium, is designed to provide a government backstop for a portfolio of £280 billion of bad or risky assets.

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