The Sunday Telegraph claimed that the British government may start selling stakes in banks bailed out during the financial crisis in H1 2012 with a £5 billion share sale in the Royal Bank of Scotland, citing sources close to the developments.
The report said stakes would be offered to sovereign wealth funds from Asia, the Middle East and institutional investors. British Treasury officials could not be reached for comments.
During the credit crisis, the government infused billions of pounds of tax-payers money and bought 83 percent in RBS and around 40 percent in the Lloyd’s banking group.
The government now plans to sell the shares as the banks return to profitability and global economic conditions improve, to fund the government’s budget deficit. However, the Conservative-Liberal Democrat coalition government is waiting for the comprehensive report on the sector by the Independent Commission on Banking in September before taking a final call.
In an interim report the commission said British banks should ring-fence their retail operations from riskier investment banking operations.
“I don’t believe it (government) is preparing anything with a definitive eye … We’ve had no conversations with investors, specifically, with this in mind”, said RBS Chief Executive Stephen Hester earlier this month. However, the Prime Minister of Qatar Sheikh Hamad bin Jassim bin Jabr al-Thani had said in February that his government is open to investing in the UK and he had discussed the matter with the British leadership.