UKFI makes £10.9bn loss

13th Jul 2009 10:34

UK Financial Instruments (UKFI), the body that controls stakes in nationalised banks, said it has made a paper loss of £10.9bn and added that it will be "challenging" to dispose its shares in the banks. UKFI, which holds a 70% stake in Royal Bank of Scotland and 43% holding in Lloyds Banking, said that every household in the country has more than £3,000 invested in Lloyds and RBS shares. In its annual report, the firm did not give an indication of when it expected to dispose its shares in the lenders."Our own task of returning these investments to the private sector is challenging," said UKFI."The amounts involved are very large, and a successful disposal of our holdings will require professionalism and patience."The group said it might dispose the shares by undertaking a number of capital markets transactions over a sustained period. "While there are many possible approaches open to us, including strategic sales, our central assumption in thinking about our disposal programme is that we are likely to be selling shares to investors in the public equity markets," said the group. It reiterated that it will operate at arms length from the government and said it will not operate in the day-to-day running of the banks but will be involved in strategic issues. John Kingman, UKFI Chief Executive, said: "UKFI is setting out our strategy to deliver on the tasks we have been given: maximising the value of these investments for the taxpayer, and returning the banks as strengthened institutions to full private ownership over time."