RBS sell-off unlikely for another five years, says Vince Cable

12th Aug 2013 08:02

UK Business Secretary Vince Cable said the sell-off of the government's 81 per cent stake in the Royal Bank of Scotland (RBS) was unlikely for another five years. Cable claimed it was "pretty unrealistic" that the bank would return to private ownership before the 2015 election. He also suggested the government would retain its holding for most of the next parliament. "I don't think it would be sensible for the government to set a rigid timetable, but given where we start from I think it is pretty unrealistic to think of RBS going back into private ownership this parliament or probably within five years," he told The Sunday Telegraph.His remarks came in contrast to David Cameron's announcement earlier this year that the taxpayers' interest should be sold "as soon as possible".RBS Chairman Sir Philip Hammond has also signalled the sale could begin as early as next year.The lender was bailed out by the government in 2008 for £45bn in the wake of the financial crisis. The government paid 502p per share. Shares were trading at 330p at 08:17 on Monday.The government has commissioned Rothschild to review its proposal to split the lender into a "good bank" and "bad bank" split to allow for greater ease in the sell-off of assets.However, such a move would incur additional costs which would either be borne by the taxpayer or by RBS's better-performing businesses. Minority investors in RBS are said to be against the restructuring. "I think there is a very strong argument for saying that the bank got too big and indeed that was the source of its undoing," said Cable. "But we are having to balance the benefits of breaking up the bank [and] the potential benefits for competition [with] the significant costs, particularly in terms of disrupting IT systems. "My colleagues in the Treasury are doing very detailed work on that cost-benefit calculation, because there is no simple yes or no answer." RD