Britain pours cold water on RBS reports

LONDON Sat Feb 16, 2013 10:11am GMT

The logo of the Royal Bank of Scotland is seen at an office in London February 6, 2013. REUTERS/Neil Hall

The logo of the Royal Bank of Scotland is seen at an office in London February 6, 2013.

Credit: Reuters/Neil Hall

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LONDON (Reuters) - Britain's finance minister George Osborne on Saturday dismissed newspaper reports the government was planning to give away its stake in state-controlled Royal Bank of Scotland by 2015, saying such discussions were "premature."

Britain owns 82 percent of RBS after rescuing the bank by pumping in 45 billion pounds ($70 billion) of capital when it neared collapse in 2008.

Newspapers reported on Saturday that Osborne and Treasury ministers were planning to sell off shares to the public at a discount or even give away the government's majority stake ahead of parliamentary elections due in 2015.

But speaking in Moscow where G20 finance ministers are meeting, Osborne poured cold water on the reports, saying such options would not be considered until the share price reached the level the former Labour government paid for them.

"It's just a premature discussion about what to do with the shares," Osborne told Sky News.

"We've got to get the Royal Bank of Scotland to a point where it is worth what the taxpayer paid then we can have a big national discussion about what to do with the shares and how to return it to the private sector."

RBS shares closed at 3.44 pounds ($5.32) on Friday, well below an average price nearer to 5 pounds the government paid for its stake.

In October, the bank said it was preparing to sell the shares in 2014, one year before the election, with the timing and sale structure up to the government. No share giveaway was mentioned.

Deputy Prime Minister Nick Clegg, leader of the Liberal Democrats, the coalition government's junior partner, backed proposals in 2011 to give the public shares in part-nationalised banks because taxpayer money had been used to keep the banking system alive.

At the time, the Treasury said it would "look at all options", but critics dismissed the idea as a headline-grabbing exercise.

($1 = 0.6442 British pounds)

(Reporting by Michael Holden; editing by James Jukwey)

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Comments (1)
Europhobe29 wrote:
The story of RBS is one of the most glaring examples of incompetence ever to soil the world of commerce, There were clearly systemic problems that would have had to have been addressed but the handling of the crisis by Brown et al was inept at the best, as they didn’t know what they were doing, or a disgraceful example of self-serving behaviour if they did that one could imagine.
Which view one takes probably depends on ones position in the political spectrum but the damage that has been done to the UK economy is little short of catastrophic. The US authorities either knew more or were actually concerned with the economy so that they achieved everything and now have been repaid pretty much all of their investment with a profit while the UK languishes in the doldrum, due in no small part to RBS de-leverageing to the tune of nearly £2 trillion. What? Brown didn’t think that that would affect the economy or. more likely, he knew exactly what it would do.
Of course, this does not excuse the current mob who obviously are now complicit but that is clearly because they have absolutely no idea what they are doing.

Feb 16, 2013 10:42am GMT  --  Report as abuse
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