By Emma Rumney and Lawrence White
LONDON, March 22 (Reuters) - The head of a Britishgovernment agency in charge of selling the country's stake inbailed-out bank Royal Bank of Scotland is to quit hisjob soon, a source familiar with the matter told Reuters onThursday.
Oliver Holbourn, Chief Executive of UK Financial Investments(UKFI), will leave as the agency prepares next week to be foldedinto UK Government Investments which manages overall governmentasset sales.
Holbourn did not answer calls to his mobile phone seekingcomment.
Former Bank of America Merrill Lynch investmentbanker Holbourn has since joining UKFI in 2013 overseen thegovernment's attempts to sell shares in the two banks, RBS andLloyds Banking Group, that were rescued during the2008-9 financial crisis.
While Lloyds last May said the government had sold its lastremaining stake, RBS remains more than 70 percent owned by thegovernment partly because of a long-running spat with U.S.authorities over mortgage mis-selling allegations that isdelaying the sale of its shares.
RBS Chief Executive Ross McEwan said on Tuesday he still didnot know when the bank expects to settle U.S. Justice Departmentallegations that it mis-sold toxic mortgage backed securities inthe run up to the financial crisis.
Britain's independent budget watchdog said last November thegovernment could begin selling $15 billion worth of RBS sharesbefore the end of the 2018-19 fiscal year. But McEwan, investorsand analysts all see settling the U.S. case as a vitalprerequisite for the sale to go ahead.
(Editing by Jane Merriman)