Britain Unlikely to Sell Bank Holdings Before 2015, Financial Times Says

The U.K. is unlikely to sell its stakes in Royal Bank of Scotland Group Plc (RBS) and Lloyds Banking Group Plc (LLOY) before the next general election in 2015, the Financial Times said, citing bankers it didn’t identify.

The European debt crisis and economic slowdown have eroded the chances of profiting from the holdings to almost nil as the banks’ are trading at about half the value of the government’s 66 billion-pound ($107 billion) bailout, the newspaper reported.

A poor outlook for economic growth and heightened regulation will hurt banks’ profitability over the next few years, the Financial Times said. Delaying the implementation of new regulations, as is likely with the Independent Commission on Banking’s proposal to protect retail units, may inject further uncertainty into the sale process, the newspaper said.

U.K. Financial Investments Ltd., which manages the government’s holdings, declined to comment, the FT said. The Treasury said it does not want to own the holdings permanently and declined to comment on the timing of a sale, according to the newspaper.