Cable (pictured) said it is ‘unrealistic’ to expect the bank to be in private hands by 2018, adding the lender is likely to be broken up before it is re-privatised.
“I don’t think it would be sensible for the government to set a rigid timetable, but given where we start from I think it is pretty unrealistic to think of RBS going back into private ownership this parliament or probably within five years,” Cable told the Sunday Telegraph.
He hinted the government may yet opt to split the bank in two, into a good and bad bank, and consequently seek to sell a number of the lender’s toxic assets.
“I think there is a very strong argument for saying that the bank got too big and indeed that was the source of its undoing,” he added.
“But we are having to balance the benefits of breaking up the bank and the potential benefits for competition with the significant costs, particularly in terms of disrupting IT systems.”
Chancellor George Osborne is also understood to favour splitting the bank into two, stating in June at the annual Mansion House speech: “With hindsight, I think splitting RBS into a good bank and a bad bank was probably what should have happened in 2008.”
Earlier this month RBS promoted its head of retail Ross McEwan to the role of chief executive, replacing the ousted Stephen Hester.
