Royal Bank of Scotland turned up the heat on rival Barclays after today sweetening the terms of its £48.2bn offer for Dutch bank ABN Amro.

Royal Bank of Scotland raised the heat on rival Barclays after today improving the terms of its £48.2bn offer for Dutch bank ABN Amro.

RBS, along with consortium partners Spain's Santander and Belgium-Dutch group Fortis, kept its offer at 71.1bn euro but said it would now pay 93% of the consideration in cash in an attempt to trump Barclays' agreed £45bn merger deal.

The increase in the cash element - up from 79% - means the consortium will pay 66bn euro (£44.7 bn) in cash, with the remaining payable in RBS shares.

The revised offer follows a Dutch court ruling last week to allow the sale of ABN's Chicago-based LaSalle banking operations to Bank of America to go ahead without shareholder approval.

RBS' initial bid was conditional on the inclusion of the business, but chief executive Sir Fred Goodwin said today the group had not considered pulling out following the court's decision.

"Going ahead without LaSalle is as attractive as going ahead with it," Sir Fred said.

"We would have preferred to get LaSalle but we are not going to get it."

Under the proposed deal, the consortium will split ABN's assets with RBS taking the cash from the LaSalle sale along with the group's institutional banking business. Santander would take ABN's Italian and Brazilian operations, while Fortis would grab its retail banking arm in the Benelux countries.

Sir Fred highlighted the opportunities available from ABN's corporate banking business.

"This is a business that services the day-to-day needs of corporates around the world, which would make us, combined with our own business, one of the pre-eminent corporate banks in the world."

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