UK Financial Investments Ltd. (UKFI) has been set up to manage the Government’s investments in financial institutions as an active and engaged shareholder, operating on a commercial basis and at arm’s length from Government.
The framework document between HM Treasury and UKFI sets a requirement that UKFI will not intervene in the day-to-day management decisions of investee companies. The companies will retain their own independent boards, which will manage the banks and determine their strategy. Decisions relating to whether to lend to individuals or firms, and the terms of those loans, remain commercial matters for banks.
However, where financial institutions take part in the Asset Protection Scheme, the Government have negotiated quantified lending agreements. RBS and Lloyds have, as part of this, agreed to make substantial extra lending available to individuals and firms in the coming year.
HM Treasury and UKFI does not comment on individual products offered by or commercial decisions taken by its investee companies.