RBS privatisation is the "light at the end of the tunnel"

Speaking this morning as RBS has posted further losses of over £5bn (£3.4bn losses expected), chief executive Stephen Hester says that "the light at the end of the tunnel" - reprivatisation of RBS - is getting closer. It was also announced that RBS considers it the "right time to begin work on a partial flotation of Citizens, our US banking business, targeted probably at around 2 years from now". As RBS is still majority owned by the UK taxpayer, overseas operations may still face some political opposition.

The bank should have most restructuring out of the way by the end of the year, and anticipates that it is "closer to being in good financial health".

The Centre for Policy Studies' Ryan Bourne has written on why we should quickly put RBS back into private hands:

Longer-term state ownership, however, blunts decision-making, depresses value and hinders long-term competitiveness. It distorts competition by offering an explicit guarantee to certain firms and invariably leads to politically-directed lending decisions. In fact, it would be better to realise Sir Mervyn King’s ambition of getting the semi-nationalised banks back into the private sector as soon as possible.

(Full article)