Watch the video above of RBS chairman Sir Philip Hampton talking about the bank's quarterly results
Taxpayer-owned shares in Royal Bank of Scotland could start being sold off as early as next year, its chairman Sir Philip Hampton said today.
Stephen Hester, chief executive of the bank which is 81 per cent owned by the taxpayer, said he was confident that the Treasury would get back more than the £45 billion it spent bailing out RBS four years ago.
He said: “We will have substantially completed the restructuring of RBS within a year to a year and a half. Given the size of the Government’s shareholdings in RBS and Lloyds they will have to be sold in several stages.
“ I would be confident that by the end of that process the average proceeds will be in excess of the price paid.”
Hampton said the bank would be in a position to start drawing up a prospectus paving the way for a share sale “from the middle of 2014”.
But there is no immediate prospect of a profitable sale by the Treasury, with the shares down 18p at 289.3p as analysts worried that, although the bank returned to profit in the past three months, the core business was not as strong as they had hoped.
RBS made a pre-tax profit of £826 million, which was the first quarterly profit since the third quarter of 2011.
But core operating profits of £1.3 billion were well below last year’s £1.6 billion with retail and commercial bank profits up but investment bank profits sharply lower as it continues to be shrunk.
Bad debt writedowns were lower and there were no further charges for mis-selling PPI or interest-rate swaps.
“Privatisation would be a terrific thing for the country both psychologically and in freeing up taxpayers’ money for other uses,” said Hester. But he added: “We have not had any recent explicit discussions with Government on the methodology or timing of privatisation.
“Those are matters for politicians. Our job is to make sure that the reality of this bank has improved.”
Hester said that RBS still had much to do, including the sale of just over 300 branches renamed as Williams & Glyn’s, the sale of the remaining 48 per cent stake in Direct Line and potentially the sell-off of the US retail bank Citizens.
Hester said a pre-IPO sale of part of Williams & Glyn’s could happen this summer but a full sell-off would not happen until 2015.Reuse content