Britain has begun sounding out sovereign wealth funds and other investors about selling stakes in its part-nationalised banks as it seeks to tap into a revival of stock market confidence in the financial sector.
UK Financial Investments, which manages the government’s 43.5% stake in Lloyds Banking Group and 70% stake in Royal Bank of Scotland, could start the process of selling tranches in both banks within a year, according to people briefed on the organisation’s plans.
Lloyds yesterday launched an open offer to replace £4bn of preference shares held by the government with new ordinary shares. The move followed the weekend announcement of the planned departure of Sir Victor Blank as Lloyds chairman amid investor unrest over his role in the bank’s much-criticised takeover of HBOS last year.
Eric Daniels, the bank’s chief executive, has also come under fire from shareholders but he has the full backing of UKFI and some institutional investors, who see him as the right man to implement the complex integration of the troubled HBOS.