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Britain's Labour party says would break up Royal Bank of Scotland

Reuters  |  LONDON 

(Reuters) - Britain's opposition Party would launch a consultation to break up state-owned Royal of into smaller local banks, the party said on Tuesday at the launch of its manifesto.

This would "create new local public banks that are better matched to their customers' needs", from the broken-up Edinburgh-based RBS, said in the manifesto launched by leader Jeremy Corbyn.

A spokesman said the was the fastest growing large in last year and provided 24 billion pounds ($30.93 billion) of new lending for the economy.

"We are delivering a simpler, safer and even more customer-focussed that generates returns for shareholders and the wider economy," he said.

is still more than 70 percent owned by the British government, nine years after a more than 45 billion pound bailout at the height of the financial crisis.

Almost a decade after was first nationalised, some investors, politicians and academics have concluded that the is too damaged to bounce back in its current form. Since its first bailout, has lost more than 52 billion pounds and has not posted an annual profit since 2007.

The former head of the of England Mervyn King was among the most high-profile supporters of a plan to break up the state-backed lender to speed up its return to health.

executives say that the has turned a corner in recent months and will have soon put the bulk of its problems behind it, revealing the profitable lender underneath.

also said it would pass a law preventing banks from closing a branch where there is a clear local need, following hundreds of branch closures in in recent years as the lenders cut costs.

($1 = 0.7760 pounds)

(Reporting By Lawrence White and Andrew MacAskill; editing by Susan Thomas)

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