Government makes £1bn loss selling portion of RBS stake

4th August 2015


The Government has reduced its stake in state-backed lender Royal Bank of Scotland by selling 5.4% for £2.1bn – a third below the price it paid.

It sold 630 million shares for 330p each, which was a 7.6p discount on Monday’s closing price.

The Government paid around 500p per share, a total of £45bn, when the bank was part-nationalised in 2008 and 2009.

The loss is equivalent to £1.07bn on the tranche of shares sold.

The taxpayer’s stake  has now dropped from 78.3% to 72.9%.

Ian Gordon, a banking analyst at Investec, told the BBC’s Today programme: “The taxpayer is being short-changed.”

In February, the share price was above 400p, so if the Government had sold then, the loss to the taxpayer would have been minimised.

RBS chief executive Ross McEwan says: “I’m pleased the government has started to sell down its stake.

“It’s an important moment and reflects the progress we are making to become a stronger, simpler and fairer bank. There is more work to be done but we’re determined to build a bank the country can be proud of.”

RBS posted a half-year loss of £153m last week, but in the three months to the end of June, it made a profit of £293m.

Bank of England Governor Mark Carney said in June that gradually selling the Government’s share  “would promote financial stability”.

Barbara Keeley, the shadow treasury minister, said the Government had “casually” lost £1bn.

Speaking on the Today programme, she said: “The most important question for the taxpayer – are we getting good value for our money? This used to be something the Chancellor used to care about, he said he would only sell these RBS shares when we get good value – clearly that’s not now.”

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