Cameron calls for faster RBS reform

David Cameron has increased the pressure on Royal Bank of Scotland's chief executive to "accelerate" reforms at the state-controlled bank amid fresh speculation about a mass offering of its shares to the public. The UK prime minister, speaking on a three-day visit to India, said the idea of a "Tell Sid" privatisation of RBS -- echoing the Thatcherite privatisations of the 1980s -- was one of a number of "interesting questions for the future". But he made clear he was becoming frustrated with the pace at which the bank, led by chief executive Stephen Hester, was being restructured and its value rebuilt. "The first job is to turn around the performance of RBS and to strengthen its balance sheet, strengthen its business and that's what Stephen Hester is doing," Mr Cameron said. "But I am keen to examine all possibilities for what we can do to put RBS, in time, back into the private sector. The relatively slow return to the government's "in price" contrasts with the US experience of its bailout and subsequent sale of AIG, the insurer, for a profit of $23bn. RBS declined to comment but, privately, senior executives at the bank pointed out that significant progress had been made in the restructuring plan launched by Mr Hester in 2009, which involves the rundown of non-core assets and paring back of its investment banking arm. "We are confident we will achieve what we set out to achieve," one said after Mr Cameron's remarks. The bank must now complete its restructuring and find a way to dispose of more than 300 bank branches, demanded under European state aid rules. Like other UK lenders it must also deal with the cost of compensating customers who were mis-sold PPI and interest rate hedging products. One route to reprivatising RBS, which is 82 per cent-owned by the taxpayer, would be giving the public "free" shares in a privatisation of the state-controlled bank. While the Treasury rubbished the prospect of such a move when first mooted by the Lib Dems in 2011, George Osborne's team did not dismiss it out of hand this month when the idea was revived by Vince Cable, the business secretary. It is understood that Treasury officials are considering the idea along with other options for the stake's eventual disposal, such as a sale to the market.

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