The U.K. government has held talks with investors including Middle Eastern sovereign wealth funds about a possible sale of part of its stake in Royal Bank of Scotland Group Plc, two people with knowledge of the talks said.
The presentations to investors in countries including Abu Dhabi are at an early stage and no deal is imminent, said the people, who declined to be identified because the discussions are private. RBS trades for little more than half the price the government paid when it bailed out the lender in 2008.
The Treasury is in talks to sell as much as a third of its 82 percent stake in RBS to Abu Dhabi, the BBC reported earlier today, without saying where it got the information. The U.K. wants to dispose of the holding by the year-end, the BBC said.
“I won’t be holding my breath on this getting done any time soon,” said Ian Gordon, a banking analyst at Investec Ltd. (INL) in London. “I find it hard to believe the government would dispose of its stake at a discount to the current price, or that a sovereign wealth fund would pay a premium.”
RBS fell 1 percent to 27.75 pence in London trading today. The government paid an average 50.2 pence a share for its stake, when it was forced to inject 45.5 billion pounds ($73 billion) into the Edinburgh-based lender from 2008 in the costliest rescue of any bank in the world. RBS stock has climbed 38 percent this year for a market value of about 31 billion pounds.
“The government’s policy has always been to return RBS to the private sector, but only when it delivers value for money for the taxpayer,” the Treasury in London said in an e-mailed statement today. “The aim is to repair and return RBS to full health so that it is able to support the U.K. economy.”
Officials at RBS and U.K. Financial Investments Ltd., which manages the government’s holding in the bank, declined to comment on the BBC report.
RBS posted a wider-than-estimated full-year loss last month on impairments in Ireland, write downs of Greek debt and compensation for customers for improperly sold loan insurance.
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