‘People Are Starting to Worry’ About Jeremy Corbyn, RBS Chair Says

(Bloomberg) -- While the U.K. grinds toward Brexit, the nation’s banks are bracing for what a Labour government might have in store for them.

“People are starting to worry” about the idea of opposition leader Jeremy Corbyn taking power if a general election is called, Howard Davies, the chairman of part-nationalized Royal Bank of Scotland Group Plc, said in an interview with Bloomberg TV.

“Corbyn does have a particular issue about RBS -- they’ve said at the moment that they won’t be buying RBS back, but they wouldn’t be selling any more either,” he said. “Whether that’s a stable position, we’ll see.”

RBS was nationalized after the 2008 financial crisis, and remains 62% owned by the state. Labour has repeatedly opposed efforts to reduce this stake, and said in February that it would halt further share sales that the current Conservative administration is planning.

For the broader banking industry, the effects of a change of government are still unknown, Davies said. “There’s not that much that’s specific about banks. Employee ownership issues would apply to all companies. In some ways, if you had a very expansionist fiscal policy, that would be quite good for the banks.”

While the banks await further details on future policy, Brexit remains the specter hanging over any U.K. election. “Everybody’s kind of holding their breath - there’s no sense of panic,” said Davies. “But at the moment they just cannot see the way out.”

To contact the reporter on this story: Marion Dakers in London at mdakers@bloomberg.net

To contact the editors responsible for this story: Ambereen Choudhury at achoudhury@bloomberg.net, Keith Campbell, James Hertling

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