RBS pushes for sale of UK government stake

Fri May 3, 2013 8:40am EDT
 
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By Matt Scuffham and Steve Slater

LONDON (Reuters) - State-backed Royal Bank of Scotland (RBS.L: Quote) on Friday pushed for the British government to start selling its 82 percent stake as early as next year even though it could mean a loss for taxpayers.

Chairman Philip Hampton said the aim was to have a business in strong enough shape to start preparing a prospectus with the government for a sale from the middle of 2014.

"It could be earlier, that's a matter for the government," Hampton said in an interview on the bank's website.

Britain pumped 45.5 billion pounds ($71 billion) into RBS during the 2008 financial crisis, leaving the government with a controlling stake.

The bank has been through a big restructuring - shedding underperforming assets and cutting jobs. It reported its first quarterly profit in 18 months on Friday. But taxpayers are still sitting on a paper loss of 19 billion pounds, based on RBS's current share price.

The government is keen to start selling its holding but is under pressure to get a good deal for taxpayers ahead of a general election in 2015.

RBS is pushing for a sale so it can run its business without state interference. Hampton has said the bank needed freedom to execute its recovery plan without political meddling.

But rival Lloyds Banking Group (LLOY.L: Quote), 39 percent state-owned after a bailout in the crisis, could prove a more attractive business to sell. Lloyds reported a big jump in first quarter profit on Tuesday, pushing its shares close to a price where the government could break even if it sold out.   Continued...

 
A sign is seen outside a Royal Bank of Scotland building in central London February 28, 2013. REUTERS/Neil Hall