Written question asked by Lord Laird (Crossbench), in the House of Lords. It was answered by Lord Myners (Labour) on Monday, 20 April 2009.

Banking: UK Financial Investments Ltd

Question: To ask Her Majesty's Government further to the Written Answer by Lord Myners on 30 March (WA 175–76) concerning banks in which UK Financial Investments Ltd (UKFI) has a majority share, what instructions UKFI has given to the banks concerning the future operation of charges, accounts and accessibility through branches.

Answer: UK Financial Investments Limited (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. This includes: monitoring performance through maintaining an active and regular dialogue with investee companies' boards to satisfy UKFI that the boards are operating effectively, and that companies' strategies protect and enhance shareholder value; voting the Government's shares wherever practicable —and disclosing how UKFI has voted; intervening with the board when necessary, should UKFI have concerns about strategy, operational performance, acquisitions or disposals; and providing regular updates to HM Treasury on the performance of the Government's investments and the effectiveness of the engagement with investee companies. 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. In this context, HM Treasury and UK Financial Investments does not have a role in advising on the personal or corporate financial arrangements with its investee companies, and does not comment on individual products offered by or commercial decisions taken by its investee companies.

Secondary information

Type: Written question
Reference: 2769; 709 c304-5WA
Session: 2008-09
Related items: Banking
Monday, 30 March 2009
Written questions
House of Lords
Subjects: Access Bank services Banks Fees and charges Government shareholding UK Financial Investments
Link: View this Written question on www.publications.parliament.uk