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Osborne wants quick RBS sale but could still take years - FT

British Chancellor of the Exchequer George Osborne delivers a speech on the UK economy to the Royal Economic Society at the Bank of England in London, January 14, 2015. REUTERS/Andy Rain

By Matt Scuffham (Reuters) - The British government would like to "get rid of" its stake in Royal Bank of Scotland as quickly as possible, British finance minister George Osborne was quoted saying on Friday, but warned a sale could take years to complete. "When I say 'get rid' of it, I mean put it into the good hands of the private sector," Osborne told the Financial Times in an interview, in which he also admitted he made a mistake in not radically restructuring the bank when the Conservative-led coalition came to power in 2010. Osborne, speaking weeks before a national election due on May 7 whose outcome is particularly uncertain, warned the huge size of the government's 79 percent stake in the bank, worth 34.4 billion pounds at current share prices, meant it could take years to complete the sale. Britain pumped 45.5 billion pounds into RBS to rescue it during the financial crisis of 2007-9, meaning taxpayers are sitting on a loss of over 11 billion pounds, and Osborne indicated he would be unwilling to sell the bank at a loss. "I think people want to see they get their money back. The British taxpayer wants to feel they haven't suffered some enormous loss. So their are constraints around it but it's certainly something I would want to get moving on in the summer after the election," he said. Industry sources said Osborne's reluctance to sell at a loss meant the government is unlikely to be able to start selling the shares for at least 18 months. Neither main British party, Osborne's Conservatives and opposition Labour, has established a clear opinion poll lead running up to the May 7 election and the outcome of the poll could affect the timing of any sale. RBS is still facing a number of investigations into past misconduct and is working through a restructuring which includes shrinking its investment activities and international operations to focus on lending to British households and businesses. It also faces a number of investigations by regulators into past misconduct including a probe by U.S. regulators into its selling of bonds backed by residential mortgages and by German authorities looking at whether its Swiss private bank helped some clients to evade tax. Potential investors are likely to want clarity on those before agreeing to buy the stock, the sources said. The FT said the government would likely follow the model adopted for the shares in Lloyds , unloaded through a series of sales to financial institutions. (Editing by David Holmes)