Lloyds and RBS may take a £10bn hit from reforms

TAXPAYERS could see the value of their stakes in part-nationalised banks RBS and Lloyds knocked by up to £10bn by the reform programme proposed by Sir John Vickers, it emerged yesterday.

UK Financial Investments told the Treasury and members of the Independent Commission on Banking it feared that the reform plans could make the government’s stake in the banks harder to sell, even at a loss, Sky News reported.

The report also voiced concerns that the banking sector could be left unattractive to investors by the reforms – though as the ICB will not set out its reforms in a final report until 12 September the UKFI report covers a number of scenarios.

UKFI has a 41 per cent stake in Lloyds and owns 83 per cent of RBS.