Royal Bank of Scotland would "inevitably" move its headquarters from Edinburgh to London if Scotland votes for independence later this year, UK Business Secretary Vince Cable said today.
Scotland will hold a referendum in September on whether to end its 307-year union with England. Polls show around 42% plan to vote against independence with 29% in favour.
Cable said the greater stability offered by Britain's established financial system and regulation would tempt the bank to move its base to England.
"I think if you were managing RBS you would almost certainly want to be in a domicile where your bank is protected against the risk of collapse," Cable told a panel of lawmakers.
"I think they already have a substantial amount of their management in London and I would have thought that inevitably they would become a London bank," he added.
RBS declined to comment on Cable's remarks.
How the bank would handle a possible split is one of many unanswered questions concerning Scotland's well-developed financial sector, which accounts for around 7% of its economic output and directly employs almost 85,000 people.
Cable also put RBS at the centre of the political debate between London and the Edinburgh over how independence would work - much of which is focused on finance and currency.
Scottish nationalists are basing their economic plans on keeping the pound by creating a currency union, but Britain sees that as a highly unlikely outcome.
The UK government has said there is no clear economic rationale for a currency union and warned that such an arrangement could create financial problems similar to those suffered by the euro zone.
Last week, Bank of England Governor Mark Carney said an independent Scotland that keeps the pound would have to give up some national sovereignty to create a banking union to protect against a financial collapse.
Cable echoed those concerns today, highlighting the importance of RBS to the debate over whether a currency union would be feasible because of its sheer size relative to the Scottish economy.
Scotland's GDP is estimated at around £130 billion strerling while at the end of September RBS had assets of £1.1 trillion.
"That, almost by definition, creates a high level of potential instability which that currency union would have to address," Cable said.
He said that after taking into account the implications of a banking union, he thought it would be in Scotland's own interests to create a new currency.
"The problems of a currency union with an independent Scotland are so difficult that it would almost certainly prove to be in Scotland's interests, and indeed the rest of the UK, that Scotland did have its own currency," he said.
BP, Britain's second biggest oil company, yesterday warned against Scotland voting for independence, saying it would create uncertainty over Scotland's future currency and mean additional costs.