UK says in talks with banks on strategy, boards

By Myles Neligan and Steve Slater

LONDON (Reuters) - The company set up to manage the British state's bank holdings said it was in talks with lenders about their strategy, just as the biggest beneficiary of the government's banking bailout pledged to delay home repossessions.

UK Financial Investments Ltd (UKFI), the company set up to manage the government's bank holdings, can agree the appointment of new non-executive directors with the three banks who are taking up to 37 billion pounds of public money.

"UKFI is now in active discussions with the banks about the composition of their boards, strategy and other matters, including discussions to identify candidates with suitable expertise to fill these new positions," it said in a statement on Monday.

It is also tasked with enforcing a commitment from the three banks taking public cash to maintain lending availability for home owners and small businesses at 2007 levels for three years.

"UKFI is putting in place arrangements to secure robust assurance that these commitments will be fully met," it said.

The statement came hours after Royal Bank of Scotland (RBS.L), which is getting 20 billion pounds ($30.07 billion) of public money, promised not to repossess the homes of mortgage customers who default until six months after they first fall into arrears.

RBS, owner of NatWest bank, said the move was designed to give overstretched borrowers a chance to resolve their financial problems as falling house prices and a flagging economy put households under pressure.

Britain's biggest mortgage lenders have already committed to waiting three months before repossessing customers' homes, under an agreement announced by British finance minister Alistair Darling last week.