Report: UK in talks with Abu Dhabi over RBS sale
Government could sell up to one third of its stake in the bank.
Abu Dhabi and the UK government are having talks - at the level of the Abu Dhabi ruling family - over the sale of a stake of state-owned Royal Bank of Scotland, a source said Tuesday.
The UK owns 82 percent of RBS, and up to a third of the bank could be sold to Abu Dhabi, according to reports.
The BBC first reported the talks on Monday.
A sale of any portion of the bank would come at a significant loss for the UK government, which acquired a stake in 2008 when shares were trading at 50p. Shares gained 6 per cent Tuesday, but at 29p, are still off more than 40 per cent from where they were when the bank was partially nationalized.
When asked late last year about a potential sale of RBS and Lloyds, the UK Treasury said:
The decision will ultimately be one that the Chancellor makes, and his priority is maximising value for the taxpayer. Because any decisions need to be taken with regard to changing economic and market conditions, UKFI [(UK Financial Investments)] does not think it is possible to state goals, such as price or time that would drive sales of the Government's shares.
The UK government acquired a 40 per cent stake in Lloyds in 2008 at the height of the recession.
Abu Dhabi first proposed buying a share of RBS in December, but the offer was rejected by the UK government on the grounds that it was poor value for money. The oil rich United Arab Emirates capital has returned £3bn on its 2008 investment in Barclays.
RBS has been in the red the past four years.