Is the UK government looking to sell its Royal Bank of Scotland stake?

There is renewed speculation about the government's stake in Royal Bank of Scotland with a suggestion from inside the company that the government will "test the water" with regards to a share sale in the short to medium term. Even though exit dates of 2013 and beyond have been suggested over the last few months it looks as though the UK government, assuming it regains power at the next election, we look to the sell off or at least reduce the stake sooner rather than later.

There is concern within the UK market place that a sale of such a stake in the operation could eventually lead to a change in ownership and indeed could attract the attention of overseas competitors. In many ways Royal Bank of Scotland and Lloyds bank are "sitting ducks" with the UK authorities likely to find it difficult to reject a significant offer for their share stakes as they need to raise as much money for taxpayers as possible.

There is also concern that the UK authorities are influencing certain areas of the UK financial market simply by holding these large stakes in Royal Bank of Scotland and Lloyds bank. However, it is unlikely that the government will give much notice before selling off these share stakes as this could impact upon the price in the market place and reduce the funds raised in the process.