Stop dithering over RBS share sale, MPs tell UKFI
UK Financial Investments (UKFI) has today faced criticism that it is stalling on ditching the government's stake in Royal Bank of Scotland.
In a hearing with the Treasury Committee, James Leigh-Pemberton, chairman for UKFI, and Oliver Holbourn, chief executive for UKFI, were grilled on why they were yet to make a call on what to do with the remaining stake, particularly as the government had already sold some shares in summer 2015.
Holbourn hit back, pointing out a number of unsolved issues circling RBS, such as the value of its impending fine from the US Department of Justice (DoJ) for mis-selling mortgaged-backed securities and the sale of Williams & Glyn, meant calling the right share price to sell at was tricky.
"We are now back, unfortunately, in wait and see mode until these issues are resolved," Holbourn said.
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Shareholders at German giant Deutsche Bank recently had a nasty shock when it was revealed that its own DoJ fine on the same issue could potentially set it back as much as $14bn (£11.2bn).
Leigh-Pemberton noted the value of RBS' DoJ fine was very much up in the air, saying the market had speculated that it could be $5bn, $12bn or even more.
However, committee member Jacob Rees-Mogg slammed the responses, remarking that uncertainty was always likely to wobble businesses' share prices and the markets generally factored this in.
"This seems to me to be a constant argument for doing nothing," Rees-Mogg said.
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The UKFI top dogs also pushed back on suggestions it was in the habit of manipulating banks, or being manipulated by government.
"We are allowed to get on with our day-to-day work," said Leigh-Pemberton, adding the level of its so-called "meddling" with the management of the banks it holds shares in was low.
"We are allowed to get on with our job, and, generally speaking, the banks are allowed to get on with theirs," Holbourn added.
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UKFI is the company with responsibility for overseeing the sale of assets picked up by government during the fallout from the financial crisis, including the shares in RBS and Lloyds.
Last month, chancellor Philip Hammond revealed plans for government to shed its last remaining shares in Lloyds.