RBS and Lloyds begin talks to sell government stakes, news report claims

12 January 2011

Discussion over the sale of shares in the Royal Bank of Scotland and Lloyds Banking Group belonging to the British government has begun, a news report has claimed.

According to the Wall Street Journal, which cited unnamed sources familiar with the matter, the two banks have been encouraging talks between investors in a bid to encourage interest in the shares before an actual sale takes place.

Although representatives from the two institutions are not selling the government-owned shares as yet, they are assisting potential investors “get up to speed” on the portfolios and thesis behind each institution, the source told the news provider.

The WSJ stated that the UK Financial Investments, the body responsible for managing the government stakes, has yet to give the go-ahead for a sale, but has provided “tacit” approval upon talks taking place.

In an interview with a German magazine during 2010, Stephen Hester, chief executive officer at RBS, said he would be “disappointed” if the government did not begin the sale of its stake during 2011.

RBS is currently 84 per cent owned by the British authorities while Lloyds is 42 per cent publicly owned.

By Jim Ottewill

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