George Osborne set to outline Lloyds and RBS plans 19 June 2013 Last updated at 13:21 The Chancellor, George Osborne, is expected to outline the government's plans for the future of Lloyds and Royal Bank of Scotland during his speech at the Mansion House later. Lloyds, which is 38%-owned by the government, could be the first of the two to be re-privatised. Some in the City believe that could happen before the next election. But the chancellor may also make clear his thinking about RBS, which is 81%-owned by the taxpayer. There has been speculation about an announcement on RBS since the bank's chief executive, Stephen Hester, announced his resignation last week. Mr Hester has said the privatisation of RBS could take up to 10 years. However, it is thought the government may want to act more quickly. Good v bad bank In its report on Wednesday, the Banking Standards Commission said the state of RBS, and its continued ownership by the government, "create serious problems for the UK economy." It said it was time to look afresh at the timetable for returning RBS to the private sector. "Although RBS management claim they will be ready to at least begin flotation of the bank in 12 to 18 months, others have challenged the credibility of this claim," said the report. The Commission also said there might be "significant advantages" to splitting RBS into a "good bank" - an active lender with a cleaned-up balance sheet - and a "bad bank" - containing the bad loans remaining from the past decade's debt bubble. By focusing the good bank on retail and commercial banking in the UK, it said its ability to lend might be strengthened, and its shares might also increase in value. But it also questioned what assets would be left in the bad bank, and whether further public funds might be needed to complete any restructuring. Lloyds plans The Treasury is currently examining the consequences of splitting RBS into a good bank and a bad bank. The Banking Standards Commission said that study ought to be published by September, and that parliament should be able to consider it. On Lloyds, the Commission said the case for keeping it in public ownership was weaker than with RBS. "Lloyds appears better-placed to return to the private sector without any additional restructuring," said the report. Lloyds is already planning to float 631 branches under the TSB brand at some point next year. This is known as Project Verde, and follows the order to sell them by the European Commission. A deal for the branches to be bought by the Co op Bank fell through in April.