MPs have urged the government to suspend further sales of shares in Royal Bank of Scotland Group (LON:RBS), and instead to consider breaking up the bailed-out lender. The comments come about three months after the Treasury started offloading its near 80-percent holding in the bank.
RBS’ share price has been little changed this morning, having lost 0.02 percent to 311.92p as of 08:01 GMT. The shares have shed some 18 percent of their value over the past year.
Kate Osamore, a Labour MP, proposed in a cross-party debate in the House of Commons yesterday that the government explore alternative options before “pushing ahead with a fire sale”. The Financial Times quoted Osamore as commenting that the government should examine the possibility of breaking up RBS into a network of 130 local “challenger” banks to better serve regions and ultimately increase the stability of the economy.
Her comments followed a petition from activists who this week sent an open letter to Chancellor of the Exchequer George Osborne, calling him to rethink his approach. Osborne is looking to sell more shares in RBS after the government raised £2.1 billion in August in its first disposal since the bailout. The sell-off, however, resulted in a £1.1-billion loss for the taxpayer, with the stock offloaded at 330p per share, well below the government’s buy-in price of 502p.
In a separate development, the Guardian reported yesterday that a report by the Financial Conduct Authority (FCA) looking into allegations that RBS deliberately pushed small business customers into default for profit would be delayed into 2016. While the FCA had initially said that it would publish the results of its probe into the allegations in the third quarter of last year, the deadline was subsequently pushed to the first quarter of the current year and then to the summer. Most recently, the City watchdog was expected to release the report by the end of the year.