RBS sale reportedly delayed amid ongoing US mis-selling settlement
The Government is waiting for RBS to clear the air with US authorities before it sells down its £3bn stake in the lender, according to reports.
The Financial Times says that, before it returns to selling its 71 per cent stake, the Government is planning to let RBS reach a settlement with the Department of Justice over the mis-selling of financial crisis era mortgage-backed securities.
Senior RBS staff have acknowledged that the looming fine is “a significant overhang on us and I think it’s holding back the Government’s ability to privatise us”.
After RBS settled other legacy issues, including a £4.2bn payment for mis-selling to the Federal Housing Finance Agency and a deal to make sure its bailout conformed with EU rules, some insiders had said the Government was likely to try and increase liquidity in the shares by restarting its sell-off over the summer.
However, a banking source tells the Financial Times that this had been taken off the table in June when Theresa May lost her majority.
A source tells the paper: “Selling ahead of the DoJ is a higher risk proposition…It would be better to have this behind us. But if we are in a situation where it could take a very long time, then we could be forced to take a different path.”