Vince Cable will revive a plan today to privatise the Royal Bank of Scotland (RBS) by distributing free shares to the public as the bank reached a £390m settlement deal for Libor scam with regulators in the UK and US.
The 82 per cent state-owned bank is expected to pay about £90m for the Financial Services Authority (FSA), £96m for the US Department of Justice (DoJ) and $325m for the Commodity Futures Trading Commission (CFTC) as part of the settlement.
Cable will urge the chancellor of exchequer George Osborne to ensure that the British government’s stake reaches private hands. In addition, he will reveal that hope of privatising the bank “now looks a distant dream, unless at an unacceptable loss”.
Nick Clegg first brought the RBS privatisation proposal in 2011 but was rejected by Osborne.
Meanwhile, John Hourican, head of investment bank at RBS, announced his resignation citing management responsibility for the Libor scam.
The bank, which will reveal Libor settlement documents today, is also expected to provide payment details of £300m in US fines from investment banker bonuses.
Stephen Hester,CEO of RBS, described the Libor scandal as “the biggest disappointment of our legacy and clean-up job to date”. He said: “We will make the case for all of you who are working tirelessly to serve our customers and turn this bank around.”
The five-year non-core assets sale of RBS worth more than £250bn is expected to close by the end of December 2013.
Earlier, Barclays and UBS have adopted a similar model to fund the fines.