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Taxpayer bank stakes chief to quit amid RBS sale delays

The banker hired by ministers to oversee Royal Bank of Scotland (LSE: RBS.L - news) 's (RBS) return to private sector ownership is to step down amid ongoing delays to the lender's sell-off.

Sky News has learnt that Oliver Holbourn, who was appointed chief executive of UK Financial Investments (UKFI) in April 2016, is to step down in the coming months.

Mr Holbourn is expected to return to the City in an undisclosed role having decided that he has devoted sufficient time to the UKFI role, according to people close to him.

A note was circulated to colleagues earlier this week informing them of Mr Holbourn's move, news of which emerged days after the Office for Budget Responsibility (OBR) published unchanged forecasts for the privatisation of RBS shares.

According to the latest OBR report, the budget watchdog anticipates the Treasury disposing of £3bn-worth of RBS shares in each of the five financial years beginning in 2018-19.

Mr Holbourn joined UKFI in 2013 as its head of capital markets, placing him in charge of designing a strategy for offloading the taxpayer's vast stakes in RBS and Lloyds Banking Group.

He joined from Bank of America Merrill Lynch, where he held a senior role in its equity capital markets function, helping corporate clients raise money from the sale of new shares.

The Lloyds privatisation concluded nearly a year ago, netting taxpayers a modest overall profit, but the RBS sell-down has proved a more protracted affair.

George Osborne, Philip Hammond's predecessor as Chancellor, did sell a £2.1bn stake in RBS in the summer of 2015, a deal which crystallised a £1bn-plus loss in the context of the price originally paid to bail out the lender.

Mr Hammond has since acknowledged that offloading further RBS shares will be difficult until the bank has reached a multibillion pound settlement with the US Department of Justice over the mis-selling of mortgage-backed securities.

Such an agreement could come within weeks.

The publicly owned shareholding in RBS is worth over £21bn at current market prices, with the shares languishing at less than half the Government's original 'in price'.

Taxpayers also continue to own billions of pounds of other financial assets nationalised during the 2008 banking crisis.

Sky News revealed this week that Pimco, the world's biggest bond fund manager, is leading a race to acquire a £5.5bn portfolio largely consisting of Bradford & Bingley mortgages.

UKFI was established by the then Chancellor, Alistair Darling, to manage the taxpayer's stakes in Britain's bailed-out banks, supposedly at arm's length from the Treasury.

Next (Frankfurt: 779551 - news) week, the agency will be subsumed into UK Government Investments, Whitehall's broader corporate governance specialist which looks after businesses such as Channel 4 and Companies House.

Mr Holbourn could not be reached for comment, while UKGI declined to comment.