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.”