UK Financial Investments Limited
| Type | Limited Government-owned corporation |
|---|---|
| Industry | Financial |
| Founded | 3 November 2008 |
| Headquarters | 2 Lambs Passage, London, EC1Y 8BB, United Kingdom |
| Key people | David Cooksey (Chairman); Robin Budenberg (Chief Executive) |
| Products | Investment Management |
| Services | Manages investments in UK Asset Resolution Ltd Lloyds Banking Group (41%) RBS Group (84%) |
| Owner(s) | HM Government |
| Website | www.ukfi.co.uk |
UK Financial Investments Ltd (UKFI) is a company set up in November 2008 by the UK Government to manage its shareholding in banks subscribing to its recapitalisation fund. They include Lloyds Banking Group (of which HM Treasury owns 41%), Royal Bank of Scotland Group (of which HM Treasury owns 83%), and until 2012 included Northern Rock. The Government is underwriting capital investments for RBS and Lloyds Banking Group (which includes HBOS), totalling £37 billion.
On 3 November 2009, the government injected further capital into RBS in particular, which resulted in the government's stake in that company rising from 70% to 83%.[1] The UKFI holding in Lloyds dropped from 43% to 41% in February 2010 after it issued 3.14 billion new shares.[2]
UKFI's also manages HM Treasury's investment in UK Asset Resolution Ltd which holds both Northern Rock (Asset Management) and Bradford & Bingley.
On 17 November 2011 it was announced that Virgin Money was going to buy Northern Rock plc for £747 million.[3] The deal went through on 1 January 2012.[4]
Technically, UKFI does not itself own any of the companies it manages, the shareholdings of each are still held by HM Treasury. UKFI is mandated with managing these specific HM Treasury assets on it's behalf.
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[edit] Investment aims
The government said the aim of the company would be to “protect and create value for the taxpayer as shareholder, with due regard to financial stability and acting in a way that promotes competition” while also ensuring that the banks they own provide "competitively priced" loans to small businesses and homeowners "at 2007 levels".[5]
[edit] Holdings
UKFI have holdings in the following companies, but also owned 100% of Northern Rock plc until 1 January 2012:
| Company | Shareholding |
| Royal Bank of Scotland Group plc | 83%[6] |
| Lloyds Banking Group plc | 41%[6] |
| Northern Rock (Asset Management) plc (held via UK Asset Resolution Ltd) | 100%[7] |
| Bradford & Bingley plc (held via UK Asset Resolution Ltd) | 100%[7] |
[edit] Board
It was envisaged that membership of the UKFI Board would comprise a private sector chairman, three non-executive private sector members, a Chief Executive and two senior Government officials from HM Treasury and the Shareholder Executive. Sir Philip Hampton became the UKFI’s first Chair and John Kingman become the first chief executive; both took up these positions in 2008.
Glen Moreno (Chairman of Pearson PLC), Peter Gibbs (Chairman of Turquoise), Lucinda Riches (ex UBS) and Michael Kirkwood (ex Citigroup) were appointed as non-executive directors in January 2009.[8]
Also in January 2009 it was announced that Sir Philip would become Chairman Designate of the Royal Bank of Scotland and step down as Chairman of UKFI.[9]. He was replaced as Chairman by Sir David Cooksey in August 2009.
On 28 October 2009 it was announced that Robin Budenberg would take over as chief executive of UKFI.
The Board comprises:
- Sir David Cooksey – Chairman
- Robin Budenberg – Chief Executive
- Peter Gibbs
- Michael Kirkwood
- Lucinda Riches - "non-executive director of The Diverse Income Trust plc (appointed March 2011), an Adviser to the Board of The British Standards Institution (appointed May 2011) and a Trustee of Sue Ryder (since 2008)." [10]
- Philip Remnant - "Chairman of the Shareholder Executive, which was formed in 2003 to improve the Government’s performance as a shareholder in government-owned businesses." [11]
- Julian Kelly
The UKFI Team:
- Jim O'Neil (will become Chief Executive in April 2012)
- Keith Morgan (to leave in 2012)
[edit] Controversy
Robert Peston of the BBC said on 24 December 2008 "It's probably no exaggeration to say that—for the coming year or two at least—UKFI will be as important to all of us as the Treasury, or the Bank of England or the City watchdog, the Financial Services Authority".[12]
It has been revealed that Glen Moreno was a former trustee of LGT Bank, a secretive company based in Liechtenstein, and embroiled in allegations of tax evasion. He has stated that he is not interested in a permanent position at UKFI.[13]
[edit] See also
[edit] References
- ^ "Alistair Darling: RBS and Lloyds bonus clampdown 'better for taxpayer'". London: Telegraph.co.uk. 2009-11-03. http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/6494477/Alistair-Darling-RBS-and-Lloyds-bonus-clampdown-better-for-taxpayer.html.
- ^ "Lloyds issue shrinks taxpayers' share to 41%". The Scotsman. 2010-02-12. http://business.scotsman.com/bankinginsurance/Lloyds-issue-shrinks-taxpayers39-share.6069625.jp. Retrieved 2012-01-03.
- ^ "Northern Rock sale announced by chancellor". BBC News. 2011-11-17. http://www.bbc.co.uk/news/business-15769886. Retrieved 2011-11-17.
- ^ "UKFI confirms completion of Northern Rock sale to Virgin Money" (PDF). UKFI. 2012-01-01. http://www.ukfi.co.uk/releases/20120101%20UKFI%20completion%20announcement.pdf. Retrieved 2012-01-01.
- ^ "New company to manage Government’s shareholding in banks". HM Treasury. 3 November 2008. http://www.hm-treasury.gov.uk/press_114_08.htm. Retrieved 2011-12-30.
- ^ a b "UKFI Market Investments". UKFI. http://www.ukfi.co.uk/about-us/market-investments/. Retrieved 2011-12-30.
- ^ a b publisher=UKFI "UKFI Wholly-Owned Investments". http://www.ukfi.co.uk/about-us/wholly-owned/ publisher=UKFI. Retrieved 2012-01-03.
- ^ Treanor, Jill (2009-01-13). "Who's in charge of our money?". London: The Guardian date=2009-01-13. http://www.guardian.co.uk/business/2009/jan/13/directors-financial-investments.
- ^ "Stock Exchange Announcement date=2009-01-16". London Stock Exchange. http://www.londonstockexchange.com/LSECWS/IFSPages/MarketNewsPopup.aspx?id=2070341&source=RNS.
- ^ http://www.ukfi.co.uk/index.php?PageID=25
- ^ http://www.ukfi.co.uk/index.php?PageID=24
- ^ Robert Peston (2008-12-24). "We are the Banks". BBC. http://www.bbc.co.uk/blogs/thereporters/robertpeston/2008/12/we_are_the_banks.html. Retrieved 2012-01-03.
- ^ Naughton, Philippe; Costello, Miles (2009-02-11). "Business big shot: Glen Moreno". London: The Times. http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5704818.ece.
[edit] External links
- UK Financial Investments Limited: official website
- HM Treasury: explanation of UKFI
- WhatDoTheyKnow.com: UK Financial Investments Ltd: Freedom of Information requests
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