The Labour Party would launch a consultation to break up Royal Bank of Scotland Group (LON:RBS) into smaller banks, Reuters has reported. The FTSE 100 lender remains more than 70-percent owned by the UK taxpayer, having struggled to return to profitability following its government bailout during the financial crisis. By contrast, the Treasury has just returned blue-chip peer Lloyds Banking Group (LON:LLOY) to full private ownership.
RBS’ share price has been steady in London this morning, having climbed 0.27 percent to 263.90p as of 09:14 BST, as compared with a 0.13-percent gain in the FTSE 100 index. The group’s shares have added more than 22 percent to their value over the past year, and are up by some 17 percent so far in 2017.
Reuters quoted the Labour Party as saying in its manifesto yesterday that it would launch a consultation to break up RBS into smaller banks, with the move set to “create new local public banks that are better matched to their customers’ needs”. The news comes ahead of the UK general election on June 8.
The FTSE 100 lender remains majority-owned by the UK taxpayer, following its £45.5-billion bailout during the financial crisis, as it has struggled to return to profitability amid hefty restructuring costs and charges for past misconduct. Last month, however, the company revealed that it had made a profit in the first three months of the year.
An RBS spokesman told Reuters that the group had been the fastest growing large bank in Britain last year, providing £24 billion of new lending for the economy.
“We are delivering a simpler, safer and even more customer-focussed bank that generates returns for shareholders and the wider economy,” he pointed out.