UK should get “handsome return” on RBS, Lloyds

Author: 
REUTERS
Publication Date: 
Thu, 2011-03-17 01:29

“We all believe that the taxpayer will get a very handsome return on that investment,” Lloyds’ former chief executive Eric Daniels told parliament’s public accounts committee.
Britain acquired a stake of around 83 percent in RBS and a 40.6 percent holding in Lloyds while pumping some 66 billion pounds ($106 billion) of taxpayers’ money into the pair in 2008 and 2009 following huge losses at both during the credit crisis.
Britain hopes to eventually sell the state’s RBS and Lloyds stakes, although authorities have said any such sale is unlikely before the Independent Commission on Banking - set up to probe reforms to the sector - publishes a final report in September.
A recent stock market slump — sparked by last week’s Japanese earthquake and the ensuing nuclear crisis — has meant that the British taxpayer has been sitting on billions of pounds of losses on its RBS and Lloyds stakes.
Lloyds shares closed down 1.5 percent at 59.45 pence  — below the average price of 63.1 pence at which the taxpayer acquired its stake in the bank.
RBS shares fell 1.7 percent to 40.7 pence — again below the average price of around 50 pence at which the taxpayer bought its RBS holding.
RBS Chief Executive Stephen Hester told the parliamentary committee that global economic uncertainty remained and that RBS still had too much risk in its business.
“The problem of imbalances in the world has not been fixed,” said Hester.

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