Treasury set for windfall if stake in RBS is sold off
The sale of the Government's shares in Ulster Bank parent Royal Bank of Scotland (RBS) would be "a symbol of Britain's recovery", its chief executive has suggested.
Stephen Hester made clear he would welcome the move, saying it would help RBS - which is 83% state-owned - and provide a boost to the nation's finances.
The head of Lloyds Banking Group refused to say when the Government's 41% stake in his company should be sold off, but also held out the prospect of a windfall for the Treasury. The taxpayer was "in the money", Eric Daniels told MPs.
Speaking to the Treasury Select Committee, Mr Hester acknowledged criticism that money invested in banks could be better spent on schools, hospitals and roads.
He denied having discussed the Government's shareholding in RBS - arising from its 2008 bailout - with Chancellor George Osborne. But he said that sales of the shares would be "a very important positive for both the nation and RBS".
"I think it would be a symbol of Britain's recovery, it would help the public purse, it would be a symbol of RBS's recovery, it would help all sides," he said.
Giving evidence separately to the select committee, Mr Daniels said it was up to the Government when it sold its shareholding in Lloyds.
But asked about the likely price, he said: "The price currently is above the break-even point for the Government, so the taxpayer is in the money."
Mr Daniels also told MPs that splitting up the banks - as the Independent Commission on Banking is exploring - would not increase competition in the sector.
"This is an enormously competitive market and I am not sure that dividing the banks further would give a better outcome," he said.
He added: "Concentration does not lead to lack of competition."
MPs on the Treasury Select Committee have criticised the 73% market share of the four main banks - Lloyds, Barclays, HSBC and RBS.
But Mr Daniels said there was less "concentration" in the UK than many other markets in the world.
The chief executive also confirmed to MPs that Lloyds is charging up to 19.3% for overdrafts.