UKFI loses 11bn on its bank stakes

UK FINANCIAL Investments (UKFI) – the company set up to manage government stakes in banks – has suffered paper losses of £10.9bn from its investment in Royal Bank of Scotland (RBS) and Lloyds Banking Group, it said yesterday.

Speaking as the organisation published its annual report, chief executive John Kingman said the value of its stakes was still well below the level at which UKFI could sell them at a profit for the taxpayer.

The government put £20bn into RBS for a 70 per cent stake currently worth £15.3bn, while Lloyds received £14.5bn in state backing for a 43 per cent stake now valued at £8.3bn.

Kingman said disposing of the government’s holdings would take “several years”, because UKFI would need to wait for market confidence to return.

But acting chairman Glen Moreno – who is not being paid for his efforts – said he could envisage the first of a series of staggered sales within 12 months.

Kingman said he was under “absolutely no pressure” from the government to sell the stakes as soon as possible.