Love or hate retail investors, would any company want 46 mn of them? That could be the situation for UK banks Royal Bank of Scotland (RBS) and Lloyds Banking Group, following a proposal made by a member of the UK’s Liberal Democrat party.
Stephen Williams, MP for Bristol West, in partnership with corporate finance adviser Portman Capital, has come up with a scheme to distribute the bank shares held by the UK government to the 46 mn people on the electoral roll. (Following bailouts during the financial crisis, the state currently owns 83 per cent of RBS and 41 per cent of Lloyds.)
Under Williams’ scheme, members of the public would be allowed to sell their shares only once the price rises above the price the government paid for them. This would allow the government to get its money back while at the same time allow ordinary people to share in any return to prosperity by the banks.