LONDON, Aug 2 (Reuters) - Britain has no plans to fu
lly nationalise Royal Bank of Scotland, government sources told Reuters on Thursday, contradicting a report in the Financial Times.
The FT said senior government ministers were discussing the possibility of buying out private investors in the bank but sources told Reuters such a move was not on the agenda.
'There is no discussion on the table, there is no proposal, it is just not an active thing we are discussing at the moment at all,' one of the sources said.
Mediobanca analysts said a full nationalisation would increase Britain's debt burden in relation to GDP and almost certainly cost the country its AAA credit rating.
'Having seen the taxpayer already suffer through the rescue of RBS, to saddle them with a book of questionable loans in the interests of political expediency is quite frankly ludicrous,' they said in a research note.
Britain already owns 82 percent of the bank after bailing it out during the 2008 financial crisis. The remaining 18 percent of the bank is owned by private investors and would need to be bought out at a premium to the current market price. The shares are worth 4.2 billion pounds at Wednesday's closing price.
The FT report said ministers had become exasperated by the barriers they believe banks are placing on lending and some think taking full control of RBS and forcing it to lend could push other banks into action.
The government is under increasing pressure to stimulate the economy which official data has shown to be in a much deeper recession than previously thought.
The latest programme to get banks lending was launched on Wednesday offering banks 80 billion pounds worth of cheap funding on condition they lend it to small firms and households.
RBS reports first-half results on Friday.
Sky News reported that the bank will set aside a further 130 million pounds to compensate customers mis-sold loan insurance, take a hit of 125 million pounds for problems related to a computer systems failure and make a provision of 50 million pounds to settle claims by small firms wrongly sold interest rate hedging products.
($1 = 0.6415 British pounds)
(Additional reporting by Stephen Mangan and Tim Castle; Editing by Stephen Powell) Keywords: RBS BRITAIN/BANKS
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