Plans to split taxpayer-owned Royal Bank of Scotland are being hindered by the significant costs of disrupting the bank’s IT systems, Business Secretary Vince Cable has claimed.

In an interview with the Sunday Telegraph Cable said that moves to sell the bank, which is 81% owned by the public, are likely to be delayed until at least 2018, claiming that a sale within the next five years would be “unrealistic”.

This delay will serve to increase pressure to separate the bank into two parts, in order to move riskier assets away from the 'good' part of the bank. Earlier this year it was announced that the Treasury had appointed Rothschild to investigate the possibility of a ‘good bank/bad bank’ split, with a particular focus on moving Ulster Bank and RBS’ UK commercial real estate.

However plans to split the bank are being complicated by the cost of disrupting the IT systems underpinning the various parts of RBS’ business, according to Cable, and could inform a decision on whether the separation would be beneficial.

He said: “I think there is a very strong argument for saying that the bank got too big and indeed that was the source of its undoing. But we are having to balance the benefits of breaking up the bank and the potential benefits for competition with the significant costs, particularly in terms of disrupting IT systems."

"My colleagues in the Treasury are doing very detailed work on that cost-benefit calculation, because there is no simple yes or no answer.”

RBS was bailed out by the government at a cost of £45 billion in the wake of the 2008 financial crisis. Under the terms of the bail out, the bank has been ordered to undergo major restructuring of its wider business in order to reduce its own size and enable greater competition.

This has created challenges for the bank in terms of separating its complex IT infrastructure. For example, plans to sell off a number of its branches to the UK arm of Santander boke down amid concerns over the difficulty of integrating accounts systems.

Meanwhile Tesco Bank completed its migration away from RBS’ IT infrastructure in 2012, though a number of technical problems were experienced as the joint venture was separated.

The divestment of Direct Line has also begun, with the insurance company choosing to implement a cloud solution from Workday to speed the process of moving staff onto separate HR systems.