He said that over the next three to four years the banks would be sold to new entrants in the retail banking sector, not to existing financial institutions, in order to increase competition in the sector. But he would only sell parts of the banks when “the time is right”.
There are rumours that buyers may include Tesco and Virgin.
The chancellor also told the BBC the government would be splitting up Northern Rock into two parts by the end of the year, with a view to selling off one part within the next three to four years. He also said the government was keen to divest some of its holdings in RBS and Lloyds.
The government currently holds a 70% stake in RBS and a 43% stake in Lloyds after last October's bail-outs.
