Royal Bank of Scotland (RBS) confirmed this morning that it was considering a rights issue that is expected to raise up to £10 billion for Britain's second-largest bank.

The bank told the London Stock Exchange today: "Following its statement on Friday 18 April 2008 and recent speculation The Royal Bank of Scotland Group plc confirms that it is considering a Rights Issue."

It added that a that a further announcement would be made in due course, although it is expected to give details of the capital raising tomorrow.

Shares in RBS rose 2.8 per cent to 395p in early trading.

The bank is also expected to announce tomorrow the £3.5 billion sale of Angel Trains, the rolling stock leasing company.

RBS board members and the bankers advising them were in talks yesterday to finalise the bank’s fund-raising plans. They are expected to be approved by a full board meeting today.

The bank plans to announce that the long-awaited sale of Angel Trains has been completed.

It is believed that the company has been sold to a consortium led by the investment firm Babcock & Brown and backed by Deutsche Bank.

RBS will also signal that it is open to offers for the insurance brands Direct Line and Churchill by confirming that it is conducting a “strategic review” of these business.

They are thought to carry a price of between £4 billion and £5 billion.

AIG, Allianz, AXA and Generali have been mentioned as possible bidders for the business.

The sale of Angel Trains would help to alleviate some of the pressure on Sir Fred Goodwin, the RBS chief executive, who said recently that the bank had no need to raise equity capital.

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