LONDON (AP) — The body set up to manage the government's stake in nationalised banks said yesterday that it will be "challenging" to return the investments to the private sector.

UK Financial Investments Ltd. said the government's stakes in Royal Bank of Scotland PLC and Lloyds Banking Group PLC, which currently represent paper losses of £10.9 billion ($17.5 billion), could be disposed of in several transactions "over a period of years".

UKFI declined to give more detail on a potential exit from the stakes in its annual report, saying it was not "possible or desirable" to say what price or time would trigger a sale.

"Our own task of returning these investments to the private sector is challenging," UKFI said. "The amounts involved are very large, and a successful disposal of our holdings will require professionalism and patience."

UKFI manages the 70 percent stake in RBS and the 43 percent holding in Lloyds that were picked up by the taxpayer after the government bailed out the banks with a £37 billion ($60 billion) capital injection last year. The government also agreed to insure £585 billion of so-called toxic assets held by the two banks.