THE Government has announced plans to offload a £2.6 billion stake in Royal Bank of Scotland, a move that will see the taxpayer’s stake reduced from 70.1% to 62.4%.
UK Government Investments, which manages the state’s shareholding, said it will sell approximately 7.7%, or 925 million shares, to institutional investors.
It is the first time shares in RBS have been offloaded since 2015.
The Treasury said in a statement: “UK Government Investments today advised the Chancellor it would be appropriate to conduct the second sale of the Government’s shareholding in the Royal Bank of Scotland. The Chancellor agreed with that advice and has authorised the process to begin.”
RBS recently agreed a $4.9bn (£3.6bn) settlement with US regulators, which removed a major hurdle to the bank’s return to private hands.
The Government hopes to sell £15bn worth of shares by 2023, about two-thirds of its stake but faces a near-£26.2bn loss on its holding, with the lender’s shares languishing well below the average 502p share price paid during the crisis era bailout, at around 280p.
The Government bought its stake in the bank for £45bn in 2008 at the height of the financial crisis.
Only last week, RBS’s outgoing finance chief Ewen Stevenson said the recent slump in European stocks, sparked in part by jitters over the rise of Eurosceptic parties in Italy – might be a cause for pause for the Government.
Earlier this year, RBS reported a bottom-line profit for the first time in a decade. Laith Khalaf, senior analyst at Hargreaves Lansdown, said: “The RBS share price has bounced back from its slump after the EU referendum, but the taxpayer is still going to be significantly out of pocket as the Government sells down its stake.
“Few argue the RBS bailout was necessary to maintain financial stability, but the cost of that intervention is now starting to emerge.”
Why are you making commenting on The National only available to subscribers?
We know there are thousands of National readers who want to debate, argue and go back and forth in the comments section of our stories. We’ve got the most informed readers in Scotland, asking each other the big questions about the future of our country.
Unfortunately, though, these important debates are being spoiled by a vocal minority of trolls who aren’t really interested in the issues, try to derail the conversations, register under fake names, and post vile abuse.
So that’s why we’ve decided to make the ability to comment only available to our paying subscribers. That way, all the trolls who post abuse on our website will have to pay if they want to join the debate – and risk a permanent ban from the account that they subscribe with.
The conversation will go back to what it should be about – people who care passionately about the issues, but disagree constructively on what we should do about them. Let’s get that debate started!
Callum Baird, Editor of The National
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules here