LONDON (Reuters) - Shares in Britain’s state-owned Royal Bank of Scotland (RBS.L) rose sharply on Tuesday after people familiar with the matter told Reuters that Britain had held talks to sell part of its stake in RBS to Abu Dhabi investors.
RBS was up 4.8 percent at 29.07 pence in early morning trade - still well below the average 49.90 pence price at which the British taxpayer acquired its stake in the bank.
“Slowly but surely, winding down the government’s stake is a better option than a quick fire sale which would struggle to attract enough buyers of the stock,” said Simon Denham, chief executive of spread-betters Capital Spreads.
“The UAE (United Arab Emirates) has come to the rescue of our banks before when they bought a huge slug of Barclays just after the banking crisis so that they didn’t fall into the hands of the government. If they can turn their investment in RBS into anything like the returns they had on their Barclays shareholding, they will do very well out of it, which in turn should be to the benefit of the wider British economy,” he added.
Two people familiar with the matter said a deal on RBS with Abu Dhabi was not imminent, however.
Britain owns 82 percent of RBS after bailing out the bank during the 2008 credit crisis.
Reporting by Sudip Kar-Gupta; Editing by David Jones