Royal Bank of Scotland wants to speed up privatisation by buying back government shares

The Royal Bank of Scotland (RBS) wants to buy back shares from the government in a bid to speed up the company's privatisation.

The bank has proposed the move by tabling a special resolution that will seek permission to make off-market share purchases from the treasury.

It will allow the lender, which is currently 62 per cent state-owned, to buy back shares through a buy-back programme.

RBS is aiming to reduce its public holding to less than 50 per cent by the end of the current parliament.

Shareholders will vote on the proposal on February 6.

"This resolution would provide the bank with the flexibility to use some of its excess capital to buy back Government shares at a time and price agreed with HM Treasury,” said chairman Howard Davies.

"The board believes that this is in the best interests of the bank and its shareholders by helping to facilitate the return of the company to full private ownership."

RBS said the buy-back could happen as part of a placement by the treasury or via a bilateral deal where the bank would buy a certain number of shares at the relevant market price.

Alternatively, it could see a trading programme involving a broker who oversees the purchase of a percentage of shares at the market price.

The bank cannot buy back more than 4.99 per cent of the government's shares in any one year.