The Royal Bank of Scotland is preparing to launch a massive rights issue to rebuild its capital reserves, a sharp reversal of its previous position that could trigger a wave of similar offerings by other lenders.

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Peter Thal Larsen suspects Royal Bank of Scotland will seek at least £10bn

The rights issue is one of a number of options RBS is considering, people familiar with the matter said, stressing that the board of directors had not yet made any decisions. The bank confirmed on Friday it would make a statement regarding its trading performance and capital position next week.