Financial Regulatory Forum

Chief executive to quit UK body holding state bank stakes

By Reuters Staff
July 28, 2009

By Sumeet Desai and Steve Slater
LONDON, July 28 (Reuters) – The body that manages Britain’s multi-billion pound stakes in the country’s part- and fully nationalised banks, said on Tuesday that John Kingman would quit as its chief executive.

Kingman, a former Treasury official who led talks on last year’s recapitalisation of the banking sector, will leave once a replacement is found, UK Financial Investments said.

The UKFI said that he had “decided to stand down to pursue other opportunities”. He has been in charge since the body was formed in November.

Kingman is likely to go into the private sector, a UKFI spokeswoman said.

He was in charge of 600 billion pounds of annual spending when previously at the Treasury, and before that worked for the Financial Times and oil firm BP.

Kingman got off to a rocky start with politicians in March, when lawmakers said it was “scandalous” that he had failed to provide details of executive pay at the two banks.

UKFI handles Britain’s 70 percent stake in Royal Bank of Scotland and its 43 percent holding in Lloyds Banking Group, which it got after pumping 37 billion pounds into the lenders. It was sitting on a loss of almost 11 billion pounds two weeks ago.

David Cooksey, who was appointed UKFI chairman also on Tuesday, will lead the search to fill the high profile CEO role.

Cooksey, chairman of London & Continental Railways and of Eurasian Natural Resources Corporation, will start his new role on Aug. 1 when acting chairman Glen Moreno will stand down from the board.

Cooksey will be paid a flat fee of 100,000 pounds a year with no bonus or pension entitlement.

UKFI said it had taken on formal responsibility for the government’s investments in Bradford & Bingley, the lender that was nationalised last year.

It is likely to take control of nationalised Northern Rock later this year.

UKFI plans to offload its shares in RBS and Lloyds through a protracted series of sales into markets. It has not set a timetable for disposals, but Kingman said earlier this month it “would inevitably take several years”.

It would need to sell its Lloyds and RBS shares above their average purchase price of 122.6 pence and 50.5 pence respectively to make a profit.

By 1110 GMT RBS shares were down 3.9 percent at 42.05 pence and Lloyds was down 2 percent at 81.7p.

UKFI employs just 11 people and is run from the Treasury, but it will move out and into separate premises, and has published a business plan including a 2009/10 budget of 4.5 million pounds.

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