Going private? RBS tells UAE it's ready to 'stand on its feet'

Royal Bank of Scotland's chief executive says he would be happy to see the UK government-owned lender sold "today" and would welcome interest from sovereign wealth funds, as he embarks on a tour of Gulf states - with video.

Royal Bank of Scotland Chief Executive Stephen Hester poses for a portrait at the Emirates Palace Hotel in Abu Dhabi, United Arab Emirates. Pawel Dwulit / The National

Royal Bank of Scotland, the British banking giant which was nationalised during the financial crisis after recording the biggest loss in UK corporate history, is now ready to return to market, the bank's chief executive says.

On the first leg of a tour of Gulf states, Stephen Hester, the bank's chief executive, said that RBS had now cleaned up the bank's balance sheet and resolved the problems that brought it to the brink of collapse in 2009.

"I'd be happy if the government started selling shares today," Mr Hester said today in Abu Dhabi. "As far as we're concerned we're ready to stand on our own two feet."

The process of privatising the bank would be unlikely until regulatory changes to the British banking system were complete, and the timing of any share sale would ultimately be decided by the UK government, he added.

"I'd be disappointed if the process of reprivatisation didn't start some time in 2012," he said.

As he embarked on a tour of Abu Dhabi, Dubai, Qatar and Kuwait, home to many of the world's largest sovereign wealth funds, Mr Hester said interest from Gulf-based government funds would be "terrific" from the bank's point of view.

Asked whether the bank was expecting participation in any future share sales from UAE sovereign wealth funds, Mr Hester said:

"There's not a privatisation specifically on the table, so I'm not out here to market one … there isn't the question to ask today," he said.

However, it was important to "keep up our contacts with investors" in the region, Mr Hester added.

"The Middle East is the location of a large amount of investment capital … RBS is a partially-government owned bank which one of these days will want to have a broader shareholding base," he added.

The Edinburgh-based RBS was 83 per cent nationalised by the British government in 2009.

Qatar's prime minister previously indicated a desire to take part in a privatisation of RBS and Lloyds Banking Group, which was also bailed out by the UK government after being merged with HBOS.

The government stakes in both banks are now managed by UK Financial Investments, alongside Northern Rock and Bradford and Bingley.