The chairman of UK Financial Investments (UKFI), the agency overseeing the sale of the UK government’s stake in Royal Bank of Scotland, told MPs UKFI remains confident of meeting its target of selling £3 billion worth of shares in RBS in the next financial year.

RBS remains more than 70% owned by the UK taxpayer partly because of long-running talks on a multi-billion dollar settlement with US authorities over mortgage mis-selling allegations.

UKFI chairman James Leigh-Pemberton told MPs on Monday: “It would be very helpful to have out of the way to enable a future sale, but it’s not the necessary condition for future sales.

“In the current environment, there are investors who I think would like to see that matter resolved before committing themselves to RBS equity.”

Last November, the UK government revived plans to re-privatise Royal Bank of Scotland with the aim of selling £15 billion of shares in the company by 2023.

The government plans to restart sales of shares in RBS before the end of the 2018-19 fiscal year and sell off £3 billion a year over five years — roughly two thirds of its stake.

The government faces a roughly £26 billion loss on its stake in RBS which it bailed out for a £45.5 billion at the height of the financial crisis.

At around 258p, RBS shares are trading well below the average 502p share price paid in the bail-out.

Speaking to MPs on the Treasury select committee on Monday, Leigh-Pemberton confirmed news that Oliver Holbourn had resigned as chief executive of UKFI after more than four years in the role.

Leigh-Pemberton added that market conditions could still derail the timetable.

“In order to sell these shares we must have markets that are conducive, we must have good investor appetite and that is highly variable,” he said.

“We have had periods over the last 24 months during which markets have been closed effectively to the making of new issues of equity.

“A long period of muted risk sentiment and a lack of demand on the part of investors to increase their exposure to equity markets could have an impact on the deliverability of this sale.

“That could be a constraint on the time table.”