DealBook: Chief of Unit Overseeing Britain’s Bailout Investments Resigns

LONDON – Jim O’Neil, who has been in charge of the British government’s stakes in Royal Bank of Scotland and the Lloyds Banking Group, resigned on Thursday to return to Bank of America Merrill Lynch.

Mr. O’Neil had been the chief executive of United Kingdom Financial Investments, the Treasury unit set up in 2008 to recoup the government’s investments in banks that had to be bailed out during the financial crisis. The office has yet to name a successor.

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Mr. O’Neil, an American, will rejoin Bank of America Merrill Lynch as co-head of the global financial institutions advisory business later this year. He will stay in London and run the unit together with William Egan, who is based in New York.

It is taking longer than initially expected to sell the British government’s 82 percent stake in R.B.S. and 40 percent in Lloyds. The market value of the investments in the two banks continues to be below the government’s initial investment costs. The debt crisis in the euro zone and banking scandals, including the improper sale of an insurance product to clients that could not benefit from it, has delayed the banks’ recovery and weighed on their share prices.

Pressure has increased lately to come up with a new plan for the government’s holdings in the bailed out banks as some lawmakers became impatient. Some politicians suggested breaking up Royal Bank of Scotland, while others said the government should hand out shares directly to taxpayers.

Mr. O’Neil has been meeting regularly with the boards of both banks to ensure that their strategies were in the interest of British taxpayers and the government.

The Treasury unit said in a statement that it saw the role of the U.K.F.I. “as critical in maximizing the value of its shareholdings in R.B.S. and Lloyds Banking Group and in returning both banks to the private sector.”

Before joining U.K.F.I. as head of market investments in 2010, Mr. O’Neil was head of corporate finance outside the Americas at Bank of America Merrill Lynch.

Article source: http://dealbook.nytimes.com/2013/04/25/chief-of-unit-overseeing-britains-bailout-investments-resigns/?partner=rss&emc=rss