The Brexit vote is a setback for the government’s attempts to sell off its stake in Royal Bank of Scotland, the chief executive of the bailed-out bank said on Monday.
As the chancellor, George Osborne, prepared to meet with the heads of the major banks to discuss the impact of the EU referendum result on Tuesday, Ross McEwan said the prospects of selling off the majority of the stake had been pushed back by a couple of years.
The remarks by the RBS chief executive on LBC radio prompted calls for the government to review its policy for the bank, which received a £45bn taxpayer rescue in 2008 and 2009.
Shares in the bank have fallen more than 30% since Britain voted to leave the EU and the share closed on Monday at 167p, well below the 502p average price at which taxpayers bought their stake in the bank.
McEwan said that while it was up to the government to sell its stake, “this will be quite a setback, let’s be honest”.
Asked how much longer the sale would take, McEwan said: “I think at least a couple of years – we’ll be pushed back because of it. But you know markets turn round and go positive as quickly as they go negative.”
Osborne said last year that he wanted to reduce the stake in RBS from 73% – after selling off a five percentage point stake in August for a £1bn loss – to 25% during the lifetime of the parliament.
Such an ambition now looks unlikely and McEwan told LBC the bank had been “knocked around by interest rates being lower for longer, therefore investors are saying, well your returns aren’t going to be as good”.
Osborne told MPs that he would be meeting bank bosses to discuss the economy, as economists cut back their forecasts for economic growth.
The acknowledgement by McEwan that the share sale could be delayed, sparked campaigners for banking reform to call for a rethink.
Christine Berry, senior economy & finance researcher at the New Economics Foundation thinktank, said: “Turning [RBS] into a network of local public savings banks could help boost real economy lending while investing in communities that have been left behind by our London-centric economic model – exactly the kinds of communities who voted to Leave. RBS is a public asset that could and should be used to rebalance the UK economy.”
McEwan, a New Zealander, was asked about how RBS would react in the event of a second Scottish referendum. He said the bank “sort of” already had two headquarters in Edinburgh and London. “We would have to move the plaque,” said McEwan.
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