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Cable urges UKFI to keep bank stakes

UK Financial Investments (UKFI) should not be too hasty in disposing of the government&rsquo;s stakes in banks, Liberal Democrat treasury spokesman Vince Cable said yesterday, after it emerged that the organisation was already sounding out potential buyers.<br /><br />It is understood that UKFI has been talking to sovereign wealth funds and other institutional investors about taking on some of its 43 per cent stake in Lloyds Banking Group and 70 per cent stake in Royal Bank of Scotland.<br /><br />But Cable yesterday urged the government to hold on to the stakes until the global economy is on the road to recovery.<br /><br />He said: &ldquo;Any sale of the state owned banks while the market remains so depressed would be disastrous for the taxpayer.&rdquo;<br /><br />Sources within UKFI said yesterday that it had &ldquo;sounded out&rdquo; potential investors, but stressed that there would be no sales until the banks&rsquo; share prices move above the level at which they were bought, in order to secure a profit for the taxpayer.<br /><br />The government bought its stake in RBS at 65.5p and its Lloyds holding at 173.3p. RBS&rsquo; share price had reached 43.1p by close of trading yesterday, with Lloyds closing at 100.3p.