Uncertainty over plans for the state-controlled Royal Bank of Scotland is threatening investor confidence in the group, a leading regulator has warned.
Paul Fisher, the markets director with Bank of England, said RBS’s ability to attract investors and sustain lending was being hampered by a lack of clarity over when it would be returned to the private sector and whether it might be split up.
Fisher – who is in charge of a BoE scheme to boost bank lending – said the indecisiveness was damaging.
“As a matter of market management, I think it is the uncertainty about RBS which has been holding investors back,” Fisher said at an investment conference in London today.
“People have been saying to us that they don’t want to invest in RBS or provide capital because they don’t know what is going to happen to the bank,” he added.
Chancellor George Osborne is expected to signal that the time is right to offload the government’s shareholding in an annual speech to financiers at the Mansion House on 19 June, but he is not expected to explain how.
The Parliamentary Commission on Banking Standards is expected to report on whether it would be better to break up RBS – which is 81 per cent owned by the state – as early as this week.
Executives at the UK’s top six banks are considering whether or not they will form a task force to respond to the report.
Barclays, HSBC, Lloyds Banking Group, Royal Bank of Scotland, Santander UK and Standard Chartered are discussing plans to produce a co-ordinated response through the British Bankers Association (BBA). However the group will not make a final decision on whether to proceed until after the commission’s report is published, sources have claimed.
The commission was set up by the government last July to examine ethics within the industry after Barclays was fined for attempting to manipulate global interest rate benchmarks.
The task force would be chaired by Sir Nigel Wicks, the BBA chairman.