An increase in the cost of wholesale funding as a result of the ringfencing of UK banks' retail operations could equate to 20% of profits before tax at Barclays and 11% at Royal Bank of Scotland, as the dust settles on the recommendations made by the Independent Commission on Banking.

Under the proposals set out in the ICB interim report, which was chaired by Sir John Vickers, UK bank's retail arms will be ringfenced, holding their own capital.