As part of the Budget, HM Treasury revealed it intends to sell off the taxpayer stakes in Royal Bank of Scotland (RBS) and UK Asset Resolution (UKAR) within the next six years.
It wants to complete the sale of UKAR assets, which are former Bradford & Bingley and Northern Rock mortgages, by March 2020, while it anticipates its shareholding in RBS to be sold by the end of the 2023-24 financial year.
Treasury said both sales were on the condition of when it represented value for money to do so and when market conditions allowed.
The UKAR mortgage book sale could prove controversial after BBC’s Panorama reported that customers who have been transferred to new lenders believed they were being treated unfairly.
Announcing the timetable in the Budget documents, Treasury emphasised that the purchaser of the mortgage book would need to be regulated by the Financial Conduct Authority (FCA).
However, this has been the case for previous sales and borrowers speaking to the BBC said it had not made a difference.
“As has been the case for all previous UKAR sales, buyers will be required to agree to UKAR’s customer treatment protections which include the Financial Conduct Authority’s (FCA) Treating Customers Fairly principles,” the Treasury said.
“There will be no changes to the terms and conditions of any of the loans that will be sold, and UKAR will require that the loans must be serviced by an FCA-regulated firm.”
UKAR’s balance sheet has reduced from £115.8bn in 2010 to £19.8bn at 31 March 2018.
Two sales of Bradford & Bingley mortgages of £11.8bn and £5.3bn respectively enabled B&B to repay its debt to the Financial Services Compensation Scheme.
Royal Bank of Scotland (RBS)
Budget documents noted that over the past year RBS had made significant further progress on resolving its legacy issues.
“The government now intends to undertake a full disposal of the RBS shareholding by 2023-24, subject to market conditions and achieving value for money,” it said.
“The government will keep all disposal options under review and, as with previous disposal programmes, expects larger disposal values in later years when increased liquidity in the shares should enable higher volumes to be sold.”
The government sold its final stake in Lloyds Banking Group in May 2017.