Qatar eyes stakes in debt-hit UK banks Lloyds and RBS

Asked whether the Gulf Arab state would invest in RBS or
Lloyds specifically, he replied: “We are very open to any investment in
the UK and we have discussed some.”

Qatar’s prime minister, who is also the chief executive of
its sovereign wealth fund Qatar Investment Authority (QIA), made the remarks
during a press conference with British Prime Minister David Cameron, who was on
a visit to the region.

Qatar has stakes in companies including retail giant J
Sainsbury, Barclays bank and German automaker Porsche through QIA.

Earlier this month the QIA’s Qatar Holding unit invested in
contingent convertible bonds issued by Credit Suisse.

Other high-profile investments made by QIA over the past
couple of years include the £1.5bn acquisition of iconic London department store
Harrods.

Analysts say QIA is set to focus increasingly on Asia and
other emerging markets, and will have to diversify away from “trophy
assets” to ensure sustainable growth. Last year QIA raised its stake in
Agricultural Bank of China.

The British government has a stake of around 83 percent in
RBS and 40.6 percent in Lloyds, after it bailed out both banks during the
credit crisis. These holdings in RBS and Lloyds are in turn managed by a
specially-formed body called UKFI.

UKFI declined to comment on the Qatari prime minister’s
remarks concerning RBS and Lloyds.

Britain is expected to eventually sell off its stakes in RBS
and Lloyds but UKFI is unlikely to start the disposal process until the UK’s
Independent Commission on Banking (ICB) – set up to probe the bank sector and
examine splitting up the UK’s top lenders — publishes its final report in
September this year.

UKFI executives also told British politicians last month
that they would ideally sell the RBS and Lloyds shares into a rising stock
market, meaning that any broader market slump could impact the process.