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KPMG earns most from bank asset plan

Source: Reuters - Mon 12th Oct 2009

A response to a freedom of information request by Reuters showed accounting firm KPMG has been paid more than any other company for work related to the government's plan to insure the risky assets of two banks.

Seven firms have been paid a total of 26.5 million pounds for work related to the government's asset protection scheme (APS), according to a Treasury response last month to a previous Freedom of Information request.

A response to a further request by Reuters showed KPMG was paid 6.5 million pounds of that total, accounting and financial services rival Ernst & Young was paid 4.3 million and Pricewaterhouse Coopers was paid 4.2 million.

Law firm Slaughter & May was paid 4.6 million pounds, the Treasury said.

Investment bank Credit Suisse Group AG was paid 3.9 million pounds and rival Citigroup was paid 1.7 million.

Asset manager Black Rock was the other firm to be paid for work on the scheme, earning 1.3 million pounds.

Part-nationalised Royal Bank of Scotland and Lloyds Banking Group plan to insure about 585 billion pounds of their risky assets through the APS.

Terms of the complex scheme have not yet been finalised. The banks agreed to participate more than seven months ago, but Lloyds is considering options to limit its involvement in the plan or raise funds privately, industry sources have said.

The Treasury said certain fees related to the APS would be recoverable from RBS or Lloyds, so 26.5 million pounds did not represent a net cost to the Treasury. 

The Treasury paid 7.1 million pounds for investment banking advice for all of 2008, which was split between Goldman Sachs Group, Morgan Stanley and Deutsche Bank AG.

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