RBS Plans To Buy Back Government Shares To Speed Up Privatisation


The Royal Bank of Scotland (RBS) is planning to buy back shares from the government in as it looks to deploy excess capital and attempts to speed up the privatisation of the company.

The government-back bank has suggested the move by presenting a special resolution that will ask for permission to execute off-market share purchases from the treasury.

Currently, the bank is 62 percent owned by the state. The said move will enable the lender, to buy back shares through a buy-back programme.

The Edinburgh-headquartered group has been exploring a share buy-back programme since last year.RBS is planning to reduce its public holding to less than 50 percent by the end of the current parliament.

The shareholders of the company are scheduled to vote on the proposal on the 6th of February.

Howard Davies, the chairman of the Royal Bank of Scotland, stated: “This resolution would provide the bank with the flexibility to use some of its excess capital to buy back Government shares at a time and price agreed with HM Treasury.”

He added: “The board believes that this is in the best interests of the bank and its shareholders by helping to facilitate the return of the company to full private ownership.”

The bank said that the buy-back could happen as part of a placement by the Treasury or via a bilateral deal where the bank would need to buy a certain number of shares at the relevant market price.

Alternatively, another option that is being considered by the lender is one where it could also see a trading programme that will involve a broker who will oversee the purchase of a percentage of shares at the market price.

Under the said proposal, the bank cannot buy back more than 4.99 percent of the shares of the government in any one year.