Qatar expresses interest in buying stakes in RBS, Lloyds

The Persian Gulf kingdom of Qatar has expressed some interest in investing in two major partially-nationalized British banks, Royal Bank of Scotland (NYSE: RBS) and Lloyds Banking Group (NYSE: LYG).

"About any investment in the state or partially-state owned banks, we are very open for any investment in the UK," said Qatari Prime Minister Sheikh Hamad bin Jassim Al-Thani, who is currently meeting with visiting UK Prime Minister, David Cameron.

"Our team has been engaged and we will continue to discuss investment in the UK.”

The Qatari Prime Minister is also chief executive of its sovereign wealth fund Qatar Investment Authority.

The British government, which currently owns 83 percent of RBS and 43 percent of Lloyds, has said it seeks to dispose of these holdings.

Qatari parties already owns a stake in another British bank, Barclays plc (NYSE: BCS); and has sizable interests in several other well-known British institutions, including luxury store Harrod's, and about 25 percent of retailer Sainsbury's.

However, UK Financial Investments Ltd. (UKFI), the agency which was set up at the height of the financial crisis in late 2008 to manage the government’s investments in British financial institutions, has previously stated that no sales of RBS or Lloyds could occur until they has some share price stability.

In addition, Robin Budenberg, the chief executive of UKFI, recently warned that if the Independent Commission on Banking (ICB) requested a break-up of UK banks, British taxpayers would be in danger of losing their 67-billion pound sterling stake in the banks.

"There may be instances where value and competition are in conflict,"Budenberg told politicians. "A dramatic separation would clearly be negative for value," he added.

The ICB will put out its recommendations on the disposition and privatization of UK banks later this year.