Jim Armitage: RBS looks set to spoil Osborne's claim that he has fixed banking mess

Outlook Temasek is clearly a beast with some appetite for the UK. Little surprise, then, that the Singapore sovereign wealth fund has become George Osborne's best new buddy. Not only did it take up the biggest slice of Lloyds' placing this week, but it appears the Treasury/UK Financial Investments has high hopes it will take a bigger bite with the next round of the sales process, probably next March.

This all plays well for the Chancellor, who can boast to the public that one of the world's biggest sovereign wealth funds is putting billions of pounds in long-term bets on the future of the British economy (hence the Treasury leaks about Temasek snapping up about 0.5 per cent of Lloyds in this week's placing.)

With Temasek bagged as a likely keystone investor in the next sale, current thinking has it that the stage two placing will be a lot bigger than the £3.3bn done this week. It's possible we could be looking at double that figure.

However, retail punters wanting some of the action should not get too excited yet.

Those in the know say the thinking is that the March(ish) sale will again be all to institutions, taking advantage of the continued high demand, particularly from US investors who ditched European banking stocks after the financial crisis.

With Lloyds' shares in effect being a bet on the UK economy, once again Mr Osborne will be able to spin the tale that global fund managers like Britain's economic odds more than those of the rest of Europe.

There will then follow a third feelgood sale for retail punters closer to the General Election, goes the theory. Mr Osborne's message: "We have fixed Labour's banking mess." That's if all goes to plan, of course.

But the election message for the Conservatives on banks will still be sullied by Royal Bank of Scotland, where the prospect of selling the taxpayer's 82 per cent stake at a profit by the end of this Parliament is precisely zero. For one thing, Treasury wonks are still engaged in making the delicate decision whether to break the bank up into "bad" and "good" à la Northern Rock. It seems hard, with a backdrop of potential political interference like that, to see those Americans and Singaporeans dipping their hands in their pockets soon.

And, with a more toxic loan book than Lloyds, a wider geographical spread and an investment banking arm to cope with, who would?

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Financial Adviser

£20000 - £60000 per annum: Recruitment Genius: Are you recently QCA Level 4 qu...

SThree: Graduate Recruitment Resourcer

£20000 - £22500 per annum + OTE £30K: SThree: SThree Group have been well esta...

Guru Careers: Application Support Analyst / 1st Line Support

£25 - 30k: Guru Careers: We are seeking an Application Support Analyst / 1st L...

Guru Careers: .NET Developer / Web Developer

£45K - £55K (DOE) + Benefits: Guru Careers: We are seeking a full stack .NET D...

Day In a Page

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

How a costume drama became a Sunday night staple
Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

Miliband promises no stamp duty for first-time buyers

Labour leader pushes Tories on housing
Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

Aviation history is littered with grand failures

But what went wrong with the SuperJumbo?
Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

Fortress Europe?

Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
Never mind what you're wearing, it's what you're reclining on

Never mind what you're wearing

It's what you're reclining on that matters
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence