In Brexit's Wake, Britain Holds Off On Plans To Sell Lloyds And RBS Stakes

Britain's government abandoned plans to sell stakes in Royal Bank of Scotland Group PLC RBS RBS and Lloyds Banking Group PLC LLOY ((Lloyds Banking Group PLC (ADR) LYG) in 2016 following the Brexit vote.

The Treasury possesses 73 percent and 9 percent of Royal Bank of Scotland and Lloyds, respectively, shares of which declined significantly after the vote.<?p>

The Plans

The Treasury's plans to decrease its ownership in the banks by offering 9 billion pounds worth of stock were put on hold till 2017, given the current economic uncertainties affected by the Brexit vote last Thursday.

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According to the sources reporting to Reuters, the finance ministry is planning no action until the consequences of the Britain's vote on banks are understood and it can be estimated whether the sale would generate value for taxpayers or not.

"The political and economic uncertainty also risks delaying government plans to sell a portfolio of $15.65 billion of loans held by Bradford & Bingley, a mortgage bank also nationalized during the financial crisis," reported Reuters, referring to an unnamed source and adding that the majority of those loans represent buy-to-let mortgages.

Both the UK Financial Investments, which manages the government's stakes in the banks, and the Treasury did not provide any remarks on this matter. Lloyds representatives said the decision is up to government, and RBS refused to comment.