UK Financial Investments Limited
Encyclopedia
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 UKFI owns 41%), Royal Bank of Scotland Group (of which UKFI owns 83%) and 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%. The UKFI holding in Lloyds dropped from 43% to 41% in February 2010 after it issued 3.14 billion new shares.
UKFI's subsidiary
UK Asset Resolution Ltd
holds both Northern Rock (Asset Management)
and Bradford & Bingley
.
On 17 November 2011 it was announced that Virgin Money were going to buy Northern Rock plc for £747 million.
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.
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.. 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.
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".
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.
Limited company
A limited company is a company in which the liability of the members or subscribers of the company is limited to what they have invested or guaranteed to the company. Limited companies may be limited by shares or by guarantee. And the former of these, a limited company limited by shares, may be...
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
Lloyds Banking Group
Lloyds Banking Group plc is a major British financial institution, formed through the acquisition of HBOS by Lloyds TSB in 2009. As at February 2010, HM Treasury held a 41% shareholding through UK Financial Investments Limited . The Group headquarters is located at 25 Gresham Street in London, with...
(of which UKFI owns 41%), Royal Bank of Scotland Group (of which UKFI owns 83%) and Northern Rock
Northern Rock
Northern Rock plc is a British bank, best known for becoming the first bank in 150 years to suffer a bank run after having had to approach the Bank of England for a loan facility, to replace money market funding, during the credit crisis in 2007. Having failed to find a commercial buyer for...
. The Government is underwriting capital investments for RBS and Lloyds Banking Group (which includes HBOS
HBOS
HBOS plc is a banking and insurance company in the United Kingdom, a wholly owned subsidiary of the Lloyds Banking Group having been taken over in January 2009...
), 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%. The UKFI holding in Lloyds dropped from 43% to 41% in February 2010 after it issued 3.14 billion new shares.
UKFI's subsidiary
Subsidiary
A subsidiary company, subsidiary, or daughter company is a company that is completely or partly owned and wholly controlled by another company that owns more than half of the subsidiary's stock. The subsidiary can be a company, corporation, or limited liability company. In some cases it is a...
UK Asset Resolution Ltd
UK Asset Resolution Ltd
UK Asset Resolution Ltd is a British financial services holding company with headquarters in the West Yorkshire town of Bingley. It was established in October 2010 to hold the two run-off elements, Bradford & Bingley and Northern Rock , of the two nationalised banks in the wake of the financial...
holds both Northern Rock (Asset Management)
Northern Rock (Asset Management)
Northern Rock plc is a British asset holding and management company which was split away from the Northern Rock bank in 2010. It is currently under public ownership, due to the bank's nationalisation in 2008...
and Bradford & Bingley
Bradford & Bingley
Bradford & Bingley plc is a British bank with headquarters in the West Yorkshire town of Bingley. In 2008, partly due to the credit crunch, the bank was nationalised and in effect split into two parts; the mortgage book remained with the now publicly owned Bradford & Bingley plc, and the deposits...
.
On 17 November 2011 it was announced that Virgin Money were going to buy Northern Rock plc for £747 million.
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".Holdings
| Company | Shareholding |
| Royal Bank of Scotland Group plc | 83% |
| Lloyds Banking Group Lloyds Banking Group Lloyds Banking Group plc is a major British financial institution, formed through the acquisition of HBOS by Lloyds TSB in 2009. As at February 2010, HM Treasury held a 41% shareholding through UK Financial Investments Limited . The Group headquarters is located at 25 Gresham Street in London, with... plc |
41% |
| Northern Rock Northern Rock Northern Rock plc is a British bank, best known for becoming the first bank in 150 years to suffer a bank run after having had to approach the Bank of England for a loan facility, to replace money market funding, during the credit crisis in 2007. Having failed to find a commercial buyer for... plc |
100% |
| Northern Rock (Asset Management) Northern Rock (Asset Management) Northern Rock plc is a British asset holding and management company which was split away from the Northern Rock bank in 2010. It is currently under public ownership, due to the bank's nationalisation in 2008... plc (held via UK Asset Resolution Ltd UK Asset Resolution Ltd UK Asset Resolution Ltd is a British financial services holding company with headquarters in the West Yorkshire town of Bingley. It was established in October 2010 to hold the two run-off elements, Bradford & Bingley and Northern Rock , of the two nationalised banks in the wake of the financial... ) |
100% |
| Bradford & Bingley Bradford & Bingley Bradford & Bingley plc is a British bank with headquarters in the West Yorkshire town of Bingley. In 2008, partly due to the credit crunch, the bank was nationalised and in effect split into two parts; the mortgage book remained with the now publicly owned Bradford & Bingley plc, and the deposits... plc (held via UK Asset Resolution Ltd UK Asset Resolution Ltd UK Asset Resolution Ltd is a British financial services holding company with headquarters in the West Yorkshire town of Bingley. It was established in October 2010 to hold the two run-off elements, Bradford & Bingley and Northern Rock , of the two nationalised banks in the wake of the financial... ) |
100% |
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 TreasuryHM Treasury
HM Treasury, in full Her Majesty's Treasury, informally The Treasury, is the United Kingdom government department responsible for developing and executing the British government's public finance policy and economic policy...
and the Shareholder Executive
Shareholder executive
The Shareholder Executive is the body within the British Government responsible for managing the government's financial interest in a range of public companies. Originally established within the Cabinet Office, it has since 2004 been part of the Department for Business...
. Sir Philip Hampton
Philip Hampton
Sir Philip Roy Hampton is the chairman of the Royal Bank of Scotland. Originally he joined RBS as the deputy chairman on the 19th of January 2009 and was promoted to chairman on the 3rd of February the same year...
became the UKFI’s first Chair and John Kingman
John Oliver Frank Kingman
John Oliver Frank Kingman is a civil servant, and is the son of Sir John Frank Charles Kingman.He was Second Permanent Secretary and managing director, public services and growth directorate at HM Treasury. On 3 November, 2008 he was appointed as chief executive of UK Financial Investments...
become the first chief executive; both took up these positions in 2008.
Glen Moreno
Glen Moreno
Glen Moreno is an American businessman. Moreno has worked for several large companies in the United States and the United Kingdom and most recently worked as acting-chairman of UK Financial Investments Limited which manages the British government's bank shareholdings.Glen Moreno was born in...
(Chairman of Pearson PLC
Pearson PLC
Pearson plc is a global media and education company headquartered in London, United Kingdom. It is both the largest education company and the largest book publisher in the world, with consumer imprints including Penguin, Dorling Kindersley and Ladybird...
), Peter Gibbs (Chairman of Turquoise), Lucinda Riches (ex UBS) and Michael Kirkwood (ex Citigroup
Citigroup
Citigroup Inc. or Citi is an American multinational financial services corporation headquartered in Manhattan, New York City, New York, United States. Citigroup was formed from one of the world's largest mergers in history by combining the banking giant Citicorp and financial conglomerate...
) were appointed as non-executive directors in January 2009.
Also in January 2009 it was announced that Sir Philip would become Chairman Designate of the Royal Bank of Scotland
Royal Bank of Scotland
The Royal Bank of Scotland Group is a British banking and insurance holding company in which the UK Government holds an 84% stake. This stake is held and managed through UK Financial Investments Limited, whose voting rights are limited to 75% in order for the bank to retain its listing on the...
and step down as Chairman of UKFI.. He was replaced as Chairman by Sir David Cooksey
David Cooksey
Sir David James Scott Cooksey, GBE is a British businessman, venture capitalist and politician.David Cooksey gained a degree in metallurgy at St Edmund Hall, University of Oxford...
in August 2009.
On 28 October 2009 it was announced that Robin Budenberg
Robin Budenberg
Robin Budenberg is the Chief Executive of UK Financial Investments the UK government body that oversees the government's investments in financial insititutions bailed out during the credit crunch....
would take over as chief executive of UKFI.
Controversy
Robert PestonRobert Peston
Robert Peston is a British journalist. Since February 2006, he has been the Business Editor for BBC News. He became known to a wider public with his reporting of the late-2000s financial crisis, especially with his scoop on the Northern Rock crisis.-Early life and education:Peston is the son of...
of the BBC
BBC
The British Broadcasting Corporation is a British public service broadcaster. Its headquarters is at Broadcasting House in the City of Westminster, London. It is the largest broadcaster in the world, with about 23,000 staff...
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".
It has been revealed that Glen Moreno was a former trustee of LGT Bank, a secretive company based in Liechtenstein
Liechtenstein
The Principality of Liechtenstein is a doubly landlocked alpine country in Central Europe, bordered by Switzerland to the west and south and by Austria to the east. Its area is just over , and it has an estimated population of 35,000. Its capital is Vaduz. The biggest town is Schaan...
, and embroiled in allegations of tax evasion
Tax evasion
Tax evasion is the general term for efforts by individuals, corporations, trusts and other entities to evade taxes by illegal means. Tax evasion usually entails taxpayers deliberately misrepresenting or concealing the true state of their affairs to the tax authorities to reduce their tax liability,...
. He has stated that he is not interested in a permanent position at UKFI.
External links
- UK Financial Investments Limited: official website
- HM Treasury: explanation of UKFI
- UK government announcement
- WhatDoTheyKnow.com: UK Financial Investments Ltd: Freedom of Information requests