RBS expected to exit £100bn state insurance scheme Exiting the APS is seen as an important milestone on RBS's path to reprivatisation that would enable the state to start selling its 82pc holding in the lender. The removal of the APS will lead to a fall in RBS's core Tier 1 capital ratio, the measure of the bank's cash reserves, from 11.1pc to 10.3pc, though is still above the minimum required under the incoming Basel III rules. Analysts at Shore Capital said the protection provided by the scheme was considered "unlikely to be required" and pointed out the bank was still selling down its toxic assets. RBS had been spending £700m a year to pay for the APS, though as the £2.5bn threshold has got closer, its payments have become quarterly and in the past month daily so as to avoid the bank overpaying. This week RBS is expected to make its final £1.4m daily payment to the APS, with sources close to the bank saying this should come today, though final authorisation to exit will have to come from the Treasury. The Treasury has now received £5bn in fees from the APS and, with RBS leaving, the scheme will be wound down, enabling it to close the Asset Protection Agency, its unit responsible for running the scheme. From now on, the Treasury's main income source from RBS will be any dividend payments the bank makes. Since RBS was nationalised it has not paid any dividends and before it could restart shareholder pay-outs it would need to overcome several legal hurdles that prevent such payments. The exit comes at a time when RBS is under increasing pressure over its strategy, with the collapse of a deal to sell 316 branches to Santander UK. Santander had originally agreed to buy the high street branches more than two years ago, but last week informed RBS of its intention to withdraw from the deal because of the repeated delays that have hit it. The branches are being sold as a condition of a state aid agreement with the European Commission following the bank's bail-out in 2008. Under the terms of the deal, RBS must sell the branches by the end of next year. No request has yet been made for an extension of this deadline, according to the EC, which also said it would not water down competition rules.