The Press and Journal (Inverness, Highlands, and Islands)
‘No desire’ for state to sell 82% stake in bailed-out RBS
Boss confirms group poised to repay last of emergency loans
The Royal Bank of Scotland’s boss, Stephen Hester, said yesterday the UK Government currently had “no desire” to sell its 82% stake.
But he added that the bailed-out bank was poised to repay the last of the emergency loans taken during the financial crisis.
Mrhester also saidheremained cautiousrbshad a “number of milestones” ahead.
Edinburgh-based RBS expects to have repaid in full the £163billion in loans
“No desire to sell at current share prices and I find that entirely understandable”
from the UK government, Bank of England (BOE) and US Federal Reserve by the end of next week after a final £5.7billion instalment.
It has yet to withdraw from the asset protection scheme, in which taxpayers effectively insure its poorer- quality loans against future losses, and is still receiving support via £8billion of cheap threeyear loans from the European Central Bank’s longterm refinancing operation.
The group’s current share price of about 25p is half the 50p paid by the government for its stake at the height of the financial crisis.
According to reports in March, the government was in advanced talks to sell up to one-third of its holding in RBS to investors in Abu Dhabi.
But Mr Hester said yesterday that a major sale of shares was probably a long way away, adding: “As far as I am aware, there is no desire to sell at current share prices and I find that entirely understandable.”
“While everyone is focused on that being the desired endgame, I’m not aware of anything that’s imminent.”
The£163billion in repaid emergency loans includes £36.6billion in liquidity assistance from the BOE, around £52billion from the US Federal Reserve and £75billion from the Credit Guarantee Scheme. Satisfying its debts allows RBS to startpaying out certain dividends that it had been banned from awarding under bailout conditions.
The bank announced a bigger hit for covering payment-protection insurance complaints as it increased the charge by £125million to £1.2billion.
First- quarter results showed operating profits of £1.18billion for the three months to March 31, compared with £1.13billion a year earlier and £144million in the final quarter of 2011.
RBS said it paid out £14.3billion of gross new loans and facilities to UK businesses during the first three months of the year, including £7.9billion to small and medium enterprises up 18% from the first quarter of 2011.
Mrhester said there had been good progress in removing mistakes of the past, adding: “We are clearly on track for the recovery that we’ve laid out.
“I’m naturally optimistic and believe things will improve but of course you’d expect a banker to be cautious.”