A sell off the taxpayer's 81% stake in Royal Bank of Scotland may not take place for another five years, according to business secretary Vince Cable.
At at time when the government is preparing to start selling its stake in Lloyds Banking Group, Cable's remarks demonstrate the contrasting fortunes of RBS which the business secretary said he expected to remain in public hands beyond the May 2015 general election – and even longer.
Chancellor George Osborne has demanded a review into whether RBS should be broken up into a good and bad bank in a move which has delayed any sell off the public stake, bought for £45bn in 2008 and 2009. The stake is currently worth closer to £30bn.
The review is being conducted by corporate advisors Rothschild and is expected to be concluded in the autumn, just as Ross McEwan takes over from Stephen Hester as chief executive of the bailed out bank.
Cable told the Sunday Telegraph: "I don't think it would be sensible for the government to set a rigid timetable, but given where we start from I think it is pretty unrealistic to think of RBS going back into private ownership this parliament or probably within five years".
He said the government was trying to weigh up the benefits of breaking up RBS with the costs it would entail, largely with IT systems.
"My colleagues in the Treasury are doing very detailed work on that cost-benefit calculations because it is not a simple yes or no answer," Cable said.
But, he said, "I have never argued that public ownership should be permanent". The management of RBS said, before the analysis of the split into good and bad banks was announced by Osborne in his Mansion House speech in June, that a prospectus to advertise a sell off could be ready by the middle of 2014.
This would indicate that a share sale could be possible before the 2015 election. Osborne had told the Mansion House gathering of bankers that the government was "actively considering options for share sales in Lloyds" and the City is now ready for a first tranche to be sold off soon, possibly in September.
Under the terms of its bailout agreed with the European Commission's state aid rules, RBS must sell off 315 branches.
This week, one of the potential bidders for those branches – W&G Investments led by former Tesco finance director Andy Higginson – is scheduled to float on the stock market. RBS, which had hoped to sell the branches to Santander before the Spanish bank pulled out, could yet decide to float the branches itself.
theguardian.com
At at time when the government is preparing to start selling its stake in Lloyds Banking Group, Cable's remarks demonstrate the contrasting fortunes of RBS which the business secretary said he expected to remain in public hands beyond the May 2015 general election – and even longer.
Chancellor George Osborne has demanded a review into whether RBS should be broken up into a good and bad bank in a move which has delayed any sell off the public stake, bought for £45bn in 2008 and 2009. The stake is currently worth closer to £30bn.
The review is being conducted by corporate advisors Rothschild and is expected to be concluded in the autumn, just as Ross McEwan takes over from Stephen Hester as chief executive of the bailed out bank.
Cable told the Sunday Telegraph: "I don't think it would be sensible for the government to set a rigid timetable, but given where we start from I think it is pretty unrealistic to think of RBS going back into private ownership this parliament or probably within five years".
He said the government was trying to weigh up the benefits of breaking up RBS with the costs it would entail, largely with IT systems.
"My colleagues in the Treasury are doing very detailed work on that cost-benefit calculations because it is not a simple yes or no answer," Cable said.
But, he said, "I have never argued that public ownership should be permanent". The management of RBS said, before the analysis of the split into good and bad banks was announced by Osborne in his Mansion House speech in June, that a prospectus to advertise a sell off could be ready by the middle of 2014.
This would indicate that a share sale could be possible before the 2015 election. Osborne had told the Mansion House gathering of bankers that the government was "actively considering options for share sales in Lloyds" and the City is now ready for a first tranche to be sold off soon, possibly in September.
Under the terms of its bailout agreed with the European Commission's state aid rules, RBS must sell off 315 branches.
This week, one of the potential bidders for those branches – W&G Investments led by former Tesco finance director Andy Higginson – is scheduled to float on the stock market. RBS, which had hoped to sell the branches to Santander before the Spanish bank pulled out, could yet decide to float the branches itself.
theguardian.com
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