UK Taps American Banker to Help Sell Stakes in Lloyds and RBS

The British government hired American investment banker Jim O'Neil to help it manage and sell its stakes in Royal Bank of Scotland (RBS) and Lloyds Banking Group (LYG).

O'Neil will join United Kingdom Financial Investments (UKFI) in October, The New York Times reported. He is currently head of corporate finance outside the Americas at Bank of America Merill Lynch (BAC). He will report to UKFI's chief executive, Robin Bundenberg.

"I look forward to engaging with Lloyds and RBS to represent the taxpayer's interest as a shareholder in these institutions," O'Neil said in a statement. "Disposing of these stakes in an orderly manner will be among the most important events in the capital markets over the coming years."

The U.K. government owns 83% of RBS and 41% of Lloyds. It took stakes in the two companies in 2008 in a bid to stabilize the country's financial sector, which had been destabilized by turmoil in world markets.

The government is unlikely to make any divestments until after September 2011, when a government-appointed commission will publish a report on the banking sector.