Royal Bank of Scotland moves closer to rejoining the private sector
Stephen Hester announced he would be disappointed if ministers have not begun to sell the Royal Bank of Scotland’s 83 per cent holdings by next year.
The government may begin sanctioning parts of RBS after it was nationalised in a government bail out scheme. As early as the beginning of next year, the bank will look to completely overhaul its investments as it prepares to return to the private sector.
Chief executive Stephen Hester told the Welt am Sonntag, a German publication, that he would like to see ministers begin selling off the government’s 83 per cent stake by early 2011. He also stressed that the sale would not take place in one go. RBS was hit hard by the financial crisis, but as slowly begun to return to its feet after posting a return in profit during the first three months of this year.
As part of its return to the private sector, however, the bank will have to reverse a decade-long international expansion, selling off many of its assets abroad. The firm has been able to raise over £1.64bn from the sale of more than 20 ventures during the past year. Last week, the bank’s share price closed at 40p. The bank has been ordered to withdraw from all sectors, like global retail banking, in which it is unable to establish itself as a market leader.
Mr Hester in the same statements said the he supported stricter rules for loans in spite of the recent economic downturn. However, he did concede that it would mean fewer loans being given out and heftier prices for borrowers.