Govt unlikely to sell bank stakes soon
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The Government is likely to hold on to its stakes in Lloyds Banking Group and Royal Bank of Scotland until the banking commission publishes its report on how to shore up the banking sector.
UK Financial Investments, which manages the government holdings in the banks, is likely to hold onto its stakes due to the uncertainty over how the banking sector will look over the coming years, The Independent reports.
The banking commission was set up in June to make policy recommendations to reduce systemic risk in the banking sector. It will produce a final report by the end of September 2011.
Uncertainty over whether the commission will recommend the break-up of Lloyds means that any sale is unlikely to be attempted until after the commission has reported its findings.
One senior banker told The Independent: “The biggest question facing the commission is Lloyds. It has between 20 and 25 per cent of mortgages, current accounts and loans and there are huge competition issues.
“You couldn’t sell any of the Government stake without reassurances that it won’t be broken up.”
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