UPDATE: UKFI Hires BofA Merrill's O'Neil To Oversee Bank Stakes

19th Jul 2010 10:50

(Adds details.) By Margot Patrick Of DOW JONES NEWSWIRES LONDON (Dow Jones)--U.K. Financial Investments Ltd., the U.K. government body that manages the state's financial sector holdings, Monday said Jim O'Neil is joining from Bank of America Merrill Lynch to oversee its 41% stake in Lloyds Banking Group PLC (LYG) and 83% share of Royal Bank of Scotland Group PLC (RBS). As head of market investments, he will also develop the strategy for divesting of the stakes, though no firm timetable has been set. O'Neil most recently was head of BofA Merrill's international corporate finance and restructuring group. He was at the bank for 17 years. O'Neil replaces John Crompton, who left earlier this year to join HSBC Holdings PLC (HBC). He will also take on the responsibilities of Tim Sykes, who had been head of market investments strategy before resigning in May. UKFI was set up in December 2008 to manage the government's holdings in Lloyds and RBS after a massive bailout to help stabilize the financial sector in October 2008. Its net investment in the two banks now totals around GBP63 billion. Many of UKFI's key personnel have since moved on, though. John Kingman, the agency's first chief executive officer, left last year, while Sam Woods, who had been chief operating officer, this month moved into a new government role, as secretary to a banking commission studying whether banks should split their retail and investment banking functions. Kingman was succeeded as CEO by former UBS AG (UBS) banker Robin Budenberg, who O'Neil will report to. "I look forward to engaging with Lloyds and RBS in UKFI's critical role of representing the taxpayer's interest as a shareholder in these institutions. Disposing of these stakes in an orderly manner will be among the most important events in the capital markets over the coming years. It is my intention to use all of my experience to protect and create value for the taxpayer from these investments," O'Neil said in a statement. A big part of his job will also be acting as "as active and engaged shareholder" at Lloyds and RBS, on matters such as remuneration and overall lending. -By Margot Patrick, Dow Jones Newswires; +44 (0)20 7842 9451; [email protected] (END) Dow Jones Newswires July 19, 2010 05:50 ET (09:50 GMT)