The City executive who has spent the last two years managing taxpayers’ stake in Royal Bank of Scotland (RBS) is to join the state-backed lender in one of its most senior posts.
Sky News has learnt that Oliver Holbourn, who has just stepped down as chief executive of UK Financial Investments (UKFI), is in talks with RBS about becoming its head of strategy.
His appointment is likely to attract attention in Westminster because of his five-year stint at UKFI, the agency set up during the financial crisis to manage the public stakes in Britain’s bailed-out lenders at arm’s length from the Treasury.
Mr Holbourn’s decision to join RBS is likely to be announced shortly, according to insiders.
He will replace Richard Kibble as the bank’s head of strategy, a role which will involve efforts to make RBS a more attractive investment proposition for City investors.
Philip Hammond, the Chancellor, has indicated that offloading more of the taxpayer’s 72% stake is off the agenda until the bank has reached a multibillion-pound settlement with the US Department of Justice over the misselling of mortgage-backed securities.
That agreement has been anticipated by the bank’s management for months and could now come within weeks, although the exact timing remains uncertain.
Mr Holbourn, who joined UKFI from Bank of America Merrill Lynch, is highly regarded in the City, and his appointment will be regarded as a coup for RBS.
It was unclear on Friday whether his move would need to be approved by Whitehall’s Advisory Committee on Business Appointments (ACOBA) or whether he would be required to delay his arrival at RBS.
Insiders refused to say when Mr Holbourn had commenced talks with the bank about his new job.
Mr Holbourn stepped down from UKFI as it was being subsumed into another Treasury unit, UK Government Investments (UKGI), which oversees publicly owned assets such as the student loan book and a stake in National Air Traffic Services.
He joined UKFI in 2013 as its head of capital markets, placing him in charge of designing a strategy for offloading the taxpayer’s vast stakes in RBS and Lloyds Banking Group.
The Lloyds privatisation concluded nearly a year ago, netting taxpayers a modest overall profit, but the RBS sell-down has proved a more protracted affair.
George Osborne, Philip Hammond’s predecessor as Chancellor, did sell a £2.1bn stake in RBS in the summer of 2015, a deal which crystallised a £1bn-plus loss in the context of the price originally paid to bail out the lender.
The publicly owned shareholding in RBS is worth over £21bn at current market prices, with the shares languishing at less than half the Government’s original ‘in price’.
Charles Donald, a Credit Suisse banker, has been hired by UKGI to oversee the RBS stake as head of its financial institutions group.
The Office for Budget Responsibility (OBR) recently published unchanged forecasts for the privatisation of RBS shares.
According to the latest OBR report, the budget watchdog anticipates the Treasury disposing of £3bn-worth of RBS shares in each of the five financial years beginning in 2018-19.
UKFI was established by the then Chancellor, Alistair Darling, to manage the taxpayer’s stakes in Britain’s bailed-out banks, supposedly at arm’s length from the Treasury.