RBS chief executive Ross McEwan warned the markets that the taxpayer-owned bank is unlikely to be sold until after the uncertainty surrounding the UK’s future dies down, following the country’s decision to leave the European Union.
In an interview with LBC Radio, McEwan told the station that:
“This will be a setback, let’s be honest. I think at least a couple of years it will be pushed back. “I think at least a couple of years — we’ll be pushed back because of it. But you know markets turn round and go positive as quickly as they go negative.”
He did not give a concrete timeline, but it is unlikely that in the coming years the government selling its remaining 73% stake in RBS will be a priority given the huge issues the UK faces in negotiating an exit from the EU, and protecting the British economy from a widely forecast recession.
RBS has been majority-owned by the British government since it was bailed out during the financial crisis, and the government has been gradually selling off small portions of the bank in the past two years. Chancellor George Osborne’s stated aim is to reduce taxpayer ownership of the bank to around 25% by the end of the current parliament in 2020.
RBS shares — which have lost more than 97% of their value since prior to the financial crisis, and around 30% since the UK’s Brexit vote — are trading down on Tuesday morning, in part as a reaction to McEwan’s downbeat comments on the chances of the bank being sold-off. Around 8:40 a.m. BST (3:40 a.m. ET) shares are trading lower by around 1.75%. Here is the chart:
In the interview, McEwan also reiterated the bank’s position on a second Scottish referendum, saying that RBS will move its registered headquarters away from Edinburgh to London should the country vote for independence.
Moving HQ to London was the bank’s official position prior to the Scottish referendum in 2014, which ended 55% in favour of Scotland staying part of the UK while 45% pipped for independence.
“We’ll work with the government up there. We’ve already had conversations with them about how you create certainty in these times. And we will be positioned to look after customers no matter what happens.”
McEwan added that it will be “interesting to see what Scotland do.”
While RBS would move its HQ out of Scotland, McEwan stressed that there would be no intention of moving either jobs or operations, and that it would involve “moving the plaque rather than any of our people.”
Last week, JP Morgan predicted that should a second Scottish referendum be granted, “Scotland will vote for independence and institute a new currency at that point.”
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