Osborne to sell RBS stake

CHANCELLOR George Osborne is to outline plans for privatising the Royal Bank of Scotland, reports suggest.

The proposals are expected to be revealed in next week’s Mansion House speech as the UK Government looks to press ahead with the sale of stakes in RBS and Lloyds Banking Group.

Both banks were bailed out following the 2008 financial crisis.

The Treasury has already committed to selling some of its Lloyds shares within the next 12 months, while sources are reported as saying that the Mansion House speech would be “an obvious platform” to outline future plans for the government’s 80 per cent stake in RBS.

The Treasury refused to comment on the speech, but Mr Osborne has recently said he wants to “get the government out of the business of owning great chunks of our banking system”.

The government could begin selling by the end of the year, allowing RBS to finish a settlement with US regulators for mis-selling mortgage securities.

THE prospect of a “Tell Sid” popular privatisation of the rump of Lloyds Banking Group has come closer with the extension of the government’s plan to sell off its shares in the bank.

UKFI , the holding company for the taxpayers’ stakes in Lloyds and RBS, has now given advisers Morgan Stanley “full discretion to continue to effect a measured and orderly sell down of the shares in the company” on behalf of the Treasury.

Two weeks before the election, David Cameron promised a sale of billions of pounds of Lloyds shares to the public within a year, at a discount of at least five per cent. It would be backed by a publicity drive similar to the “Tell Sid” British Gas campaign in 1986 which created millions of new shareholders in the UK’s first privatisations. The retail offering is expected to account for up to a third of the government’s outstanding stake, currently valued at around £12bn.

Chancellor George Osborne has said a Royal Mail-style cap of £1,000 may operate on share bids. Industry sources say a possible window of opportunity for the sale would be next March, after Lloyds publishes its 2015 results.

UKFI said the Lloyds stake, which began in 2008 at 41 per cent, had been reduced to under 19 per cent and the trading plan had now been extended to December 31.

The government still holds 13.6bn shares, which were up 1.1 per cent at 88.7p, and has so far recouped just over half of its £20bn bail-out cost.