Osborne Said to Mull Sale of Bradford & Bingley Assets, Sky Saysby and
Sale to be unveiled in budget could raise $23 billion
Chancellor seeks to reach U.K. surplus by end of decade
U.K. Chancellor George Osborne will call for selling assets of Bradford & Bingley, a failed bank rescued by the government, in the budget he unveils next week, Sky News reported on Saturday, quoting government officials it didn’t identify. A sale could raise 16 billion pounds ($23 billion).
Timing of the proposed sale is unclear, with some officials saying it could take many months, Sky News said. A spokesman for the U.K. Treasury declined to comment to Bloomberg News.
Osborne is wrestling with presenting a budget that will show a surplus by the end of the decade, but he’s been stymied by a weaker economy and lower tax revenues. His plan to sell the government’s shares of Royal Bank of Scotland Group Plc, which could generate as much as 5.8 billion pounds, has stalled.
Osborne last year outlined plans to raise 5.8 billion pounds in each of the next five fiscal years, which begin on April 1. In the months since, the value of Britain’s 73 percent stake in RBS, rescued in the biggest banking bailout in the world at the height of the financial crisis, fell to about 19.4 billion pounds.
The possibility of getting less cash from an RBS sale as well as potential delays in disposing of other assets from 2008 bailout has become a threat to the government’s goal of balancing its budget. Osborne last month warned that he may make further cuts in public spending amid an economic recovery that hadn’t advanced as he hoped.
He has previously defended selling RBS shares at a loss because he’s been able to sell loans issued by collapsed lender Northern Rock Plc and dispose of a stake in bailed-out Lloyds Banking Group Plc at a profit.
However, he was forced to postpone sales of the nation’s remaining 9.2 percent stake in Lloyds earlier this year amid a stock slide and turbulent global markets.
Bradford & Bingley was nationalized in September 2008. Its saving and retail branch business was sold to Abbey National, now part of Banco Santander SA’s U.K. operations, while the government kept the mortgage business. B&B closed to new business after its nationalization.