UKFI admits selling stakes in nationalised banks will be “challenging”

”UKFI

UK Financial Investments (UKFI), the body set up to manage taxpayers’ interests in rescued banks, has today admitted that returning investments to the private sector will be “challenging”.

According to the body, each household in the country has over £3,000 invested in Lloyds Banking Group and Royal Bank of Scotland (RBS), which are 43% and 70% owned by the taxpayer respectively.

The UKFI said it is sitting on paper losses of almost £11 billion and it will take time to sell the shareholdings.

John Kingman, UKFI chief executive, said: “Today UKFI is setting out our strategy to deliver on the tasks we have been given: maximising the value of these investments for the taxpayer, and returning the banks as strengthened institutions to full private ownership over time.”

While the UKFI did not outline a time frame for disposing of the shares, it did say it expects “to undertake a number of capital markets transactions over a sustained period”.

The Treasury hopes that the selling of the stakes will eventually generate a profit for the taxpayer.

However, these stakes are set to increase when the Government’s Asset Protection Scheme takes effect, taxpayers will probably own more than 60% of Lloyds and over 80% of RBS.

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