ROYAL Bank of Scotland has underlined its appetite for a return to full private ownership after revealing plans to get shareholder approval to buy shares in the institution currently held by the UK Government, writes Scott Wright.

Edinburgh-based Royal, which remains 62.4 per cent owned by UK taxpayers following its £45.5 billion bailout during the financial crisis, has tabled a special resolution seeking authority from investors to make off-market purchases of ordinary shares from the Treasury. The resolution will be proposed at a general meeting in Edinburgh on February 6.

The bank noted in a statement to the market last night that the purpose of the directed buyback would be to help facilitate its return to full private ownership through the use of excess capital.

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Royal first mooted the special buyback in September, when then deputy finance director Katie Murray said the bank had opened talks with regulators over the process. It was reported then that the bank had excess capital of around £4 billion, after reaching a $4.9 billion (£3.6bn) settlement with the US Department of Justice over its role in the sale of residential mortgage-backed securities in the years before the financial crisis of 2008 and 2009.

Royal Bank of Scotland chairman Sir Howard Davies said: “This resolution would provide the bank with the flexibility to use some of its excess capital to buy back Government shares at a time and price agreed with HM Treasury.

“The board believes that this is in the best interests of the bank and its shareholders by helping to facilitate the return of the company to full private ownership.”

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The UK Government began selling down its shares in Royal Bank last year when it sold a 7.7 per cent stake to institutional investors at a loss to taxpayers.

Analysts have said a further sale by ministers is unlikely at present because of the continuing Brexit uncertainty, news agency Reuters reported.

Shares in Royal Bank of Scotland closed up 3.2p, or 1.37 per cent, at 237p.