UK names head of agency to manage bank stakes

By James Davey and David Milliken

LONDON (Reuters) - Britain said the chairman of supermarket chain J Sainsbury, Philip Hampton, will oversee a new government holding company to own stakes in major high street banks, details of which were unveiled on Monday.

A senior British Treasury official closely involved in the government's 37 billion pound ($60 billion) plan to recapitalise British banks, John Kingman, will be chief executive of the new body, UK Financial Investments (UKFI).

Chancellor Alistair Darling confirmed to a parliamentary committee that UKFI would be run at arm's length from the government and on a commercial basis, and did not aim to hold big stakes in banks for the long term.

The British government is likely to become the largest shareholder in HBOS -- the country's biggest mortgage lender -- Royal Bank of Scotland and Lloyds TSB unless private investors show unexpected demand in upcoming share issues by the banks.

Northern Rock, which was already nationalised, and part of Bradford & Bingley will also be owned by UKFI.

The government has backed a takeover of HBOS by Lloyds, and Darling said there was no alternative bid on the table, despite reports that an unnamed European bank might be preparing a counterbid.

"Indeed it is open to anybody else to come along and put in a bid for HBOS. The only thing I'd have to say to you is that so far no other bid has been put in place," he told legislators.

The pro-independence Scottish National Party (SNP), which runs Scotland's regional government, has criticised the HBOS takeover for weakening the Scottish financial sector.