Government set to sell part of RBS stake leaving taxpayers facing multi-billion pound losses


The Government could sell part of its multi-billion pound stake in the Royal Bank of Scotland in a move which would leave taxpayers facing steep losses, it has been claimed.

British taxpayers own more than 70 per cent of the banking chain after the Government pumped £45.5billion into propping it up in the 2008 financial crash.

Plans to sell the shares have been delayed for three years but reports have circulated over recent months that they are back on the table.

But taxpayers are expected to incur losses of up to £20bn if the shares are offloaded in the near future as their prices are well down on what was paid for them.

City bankers and investors have been ‎told the first tranche of shares could be  sold as early as this week, according to Sky News

British taxpayers own more than 70 per cent of RBS after the Government pumped £45.5billion into propping it up in the 2008 financial crash. If shares are sold in the coming days then taxpayers face heavy losses on this investment

Although some bankers warned that the sale could be delayed if ministers are unable to prove they are getting value for money.

One City analyst suggested the Government could sell around 10 percent of its stock in the bank – valued at more than £3billion.

A fund manager at a major institutional investor told Sky the City had been ‘awash with speculation’ in recent days that a Treasury announcement is imminent.

RBS is due to hold its annual general meeting on Wednesday, but it remains unclear whether a sale would take place prior to that or shortly after it.

Chancellor Philip Hammond would have to approve any sale and ensure it meets guidelines dictating when is an appropriate time to sell shares.

The UK Government Investments‎ (UKGI) has previously said it is ‘an entirely fair assumption’ that it would be able to sell a £3bn stake in RBS during this financial year – with projections for a further £12bn of disposals during the next four fiscal years.

But shares in the bank are well down on what the Treasury bought them for when it rescued RBS from collapse.

RBS was rescued from collapse with capital injections from the Treasury totalling £45.5bn at an average share price of 502p.

Shares in the bank closed at 289.7p on Friday making the taxpayers’ stake worth just under £24.5bn.

And this is well below the 330p price at which George Osborne sold the last load of the Government’s shares for in August 2015.

The City has long abandoned any hope that all of the taxpayers’ £45.5bn could be clawed back from the sale of RBS shares.

RBS would not comment on the report.