The UK government which is looking to offload it’s stake in the Royal Bank Of Scotland has told MP’s that it is unable to sell it’s 73% stake in the bank, due to a threat of a massive fine from the US Government of nearly $12 billion.
The House Of Commons Treasury Select Committee was told by the chairman of UK Financial Investments, James Leigh-Pemberton that the possible size and amount of the fine from the US, was creating uncertainty and nervousness amongst possible. investors.
Mr Pemberton said that,
“The fine might be $5bn, it might be $12bn, based on what happened to Deutsche Bank it could be more.”
RBS and Deutsche Bank are under severe scrutiny from US government financial authorities over their role in the 2008 financial crisis which was triggered by the banks involvement in the mis-selling of residential mortgage-backed securities.
From the bbc.co.uk
Chancellor Philip Hammond has said uncertainty about RBS’s US fine is one of the main reasons the government cannot sell more of its 72% holding in the bank.
It is also likely the Justice Department will wait until President-elect Donald Trump appoints a new Attorney General before it focuses on the case.
The range of possible outcomes meant investors could not work out how much RBS’s shares should be worth, Mr Leigh-Pemberton said.
RBS also needs to resolve its disposal of Williams & Glyn branches before investors will be interested in buying shares, he added.