UK banks sell-off talk grows after US ditches last of Citi

Speculation that the Treasury is readying a sale of its stakes in Royal Bank of Scotland and Lloyds Banking Group rose today after America offloaded the remainder of its holding in Citigroup.

The US Treasury Department said overnight that it had sold off its last 2.4 billion shares in the Wall Street bank at $4.35 each. That will have given it more than $10 billion (£6.3 billion), a profit only if the cost of holding so many bad assets for so long are ignored.

"By selling all the remaining Citigroup shares today, we had an opportunity to lock in substantial profits for the taxpayer and avoid future risk," Tim Massad, acting assistant Treasury secretary for financial stability, said. "With this transaction, we have advanced our goals of recovering [Troubled Assets Relief Program] funds, protecting the taxpayer, and getting the government out of the business of owning stakes in private companies."

During the height of the financial crisis in late 2008, Citigroup received more than $45 billion in federal aid in exchange for preferred shares in the company. The government later restructured that package, converting a portion of its holdings into common stock.

The UK Government owns 84% of RBS and 41% of Lloyds. It bought into the former at 49.9p and the latter at 63.2p. RBS today rose 0.74p to 41.86p and Lloyds was up 1.34p at 67.44p.