UK Financial Investments boss Jim O’Neil quits, leaving Government with banking sell-off headache

Hopes that the Government may soon be able to sell off its stakes in Royal Bank of Scotland and Lloyds took a further blow today when the man in charge of managing the holdings abruptly quit.

Jim O’Neil, the chief executive of UK Financial Investments, said he will leave this year to return to Bank of America Merrill Lynch, which he left to take up the UKFI role in 2010.

The Treasury would like to return both banks to full private ownership, but depressed share prices and the lack of investor trust in the banking sector has made it so far impossible.

O’Neil, an equity capital markets expert, may feel there is little point in him lingering at the post given market conditions. There have been several calls lately for RBS to be broken up rather than reprivatised. UKFI says it will recruit a new chief executive to “help execute its mandate from HM Treasury to manage the Government’s shareholdings in the banking sector”.

O’Neil said: “I wish to thank my colleagues at UKFI as well as everyone at HM Treasury, Lloyds, RBS and UKAR for all of their support. I look forward to watching UKFI’s continued progress.”