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UK's Osborne Says Made Error In Not Restructuring RBS Years Ago - Report

Tom Burroughes

6 March 2015

The UK finance minister George Osborne said he made a mistake in not radically restructuring Royal Bank of Scotland, which is majority-owned by the UK taxpayer, in 2010, but says he wants to move rapidly to dispose of it after the next general election, due in May, the Financial Times reported.

RBS is already planning to offload its non-UK wealth management arm, including the Coutts International business, as part of changes to how it operates.

The bank was bailed out by the former government led by Gordon Brown in 2008 and, since then, has been moving to recover to a position where at some point it can be privatised.

Osborne reportedly said that for several years he went along with RBS’s then insistence that the investment bank was going to be a viable business with operations all over the world. “I certainly regret that,” he said. “I did what I could to correct it.”

The minister is said to have brought about the removal of Stephen Hester, chief executive at the time, in 2013, to put in place a new management team to focus the group on its status as a UK retail bank.

“When I say ‘get rid of it’, I mean put it into the good hands of the private sector,” Osborne told the FT. But he said the size of the stake was “massive”, and suggested the sale could take years to complete.