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Taxpayer bank aid could last 10 years

Taxpayers may still have a stake in RBS and Lloyds Banking Group for 10 years after UKFI admitted that its investments were in huge deficit.

The 2009 UKFI annual report, which was released on Monday this week, revealed that paper losses in Government bank shares stood at 10.92bn in June, down from 18.14bn in February.

UKFI currently owns 70 per cent of RBS and 43 per cent of Lloyds Banking Group after investing 15.3bn and 8.3bn respectively in the banks.

UKFI acting chairman Glen Moreno says the task of reprivatising the two banks will not be easy due to the size of the debts but says the disposal of the investments will eventually recoup tens of billions of pounds for taxpayers.

He says: “We all have a stake in UKFI’s success and the group understands the importance of this challenge.”

Royal London Asset Management head of equities Jane Coffey says: “If you look at other countries, it was five to 10 years until they sold the stakes that they bought.”

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