The Bank of England’ markets director Paul Fischer to end the uncertainty over Royal Bank of Scotland Group Plc (NYSE:RBS) (LON:RBS)’s long-term plans. Fischer said the lack of clarity over when the state-controlled bank will be returned to the private sector has hampered the bank’s ability to sustain lending and attract investors. Another uncertainty is whether Royal Bank of Scotland Group Plc (NYSE:RBS) (LON:RBS) would be split up, as the outgoing Bank of England governor Mervyn King has advocated.
British government bailed out Royal Bank of Scotland Group Plc (NYSE:RBS) (LON:RBS) in 2008 by pouring in 45.8 billion pounds ($71.4 billion) of taxpayers’ money. In return, the government has accumulated an 81 percent stake in the bank. In a speech to financiers on June 19, finance minister George Osborne is expected to hint whether it’s the right time to sell the government’s stake. Paul Fischer said many people have told him they don’t want to invest in the bank because they just don’t know what would happen to it.
The U.K. government and Bank of England have made it a priority to increase bank lending. Last year, the two decided to offer cheap finances if banks lend more to help revive the sluggish economy. In April, the government extended the Funding for Lending Scheme to 2015, and encouraged banks to lend more to small businesses, reports David Milliken of Reuters.
RBS CEO Stephen Hester Exits
The Royal Bank of Scotland Group Plc (NYSE:RBS) (LON:RBS) board of directors said Tuesday that the company’s embattled CEO Stephen Hester will step down by the end of this year. The bank said in a press release that it was preparing for the future when Royal Bank of Scotland Group Plc (NYSE:RBS) (LON:RBS) gets out of the government ownership. But Hester was unable to commit to take the bank through the privatization process and lead it in the years to follow despite heading Royal Bank of Scotland Group Plc (NYSE:RBS) (LON:RBS) for the past five years.
After being appointed as the Group CEO in 2008, Stephen Hester has led the rescue of the bank, its recovery and complex restructuring. Chairman Philip Hampton will lead the search for a successor. Philip Hamilton said the bank will b ready for privatization by the middle of next year.
American shares of Royal Bank of Scotland Group Plc (NYSE:RBS) (LON:RBS) were down 3.71 percent to $9.85 at 3:12 PM EDT.