The Royal Bank of Scotland on Wednesday denied a newspaper report it was planning to sell a portfolio of more than 1,300 UK residential properties owned by its property arm, and was considering floating them on the stock exchange.
The Guardian newspaper said the properties were worth around 200 million pounds and owned by RBS through a subsidiary called West Register, which held assets valued at more than 3 billion pounds, mostly in the UK and Germany.
"There are no plans to sell off a portfolio of properties or to float it on the stock exchange," a spokesman for state-backed RBS told Reuters.
The Guardian said the move would be seen as the creation of a mini "bad bank" and the offshoot would almost certainly form part of the potential bad bank that Chancellor George Osborne was considering hiving off from the rest of RBS.
Reuters reported in September that RBS could create an internal bad bank to house its problem loans, even if the government decided not to enforce its breakup.
(Reporting by Tasim Zahid in Bangalore; editing by David Evans)