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UK sells 5.4% RBS stake at a loss of £1bn

BBR Staff Writer Published 05 August 2015

The British government has sold off the first installment of shares of the Royal Bank of Scotland (RBS) at a loss of £1bn.

rbs

The first sale of a 5.4% stake at 330p a share, a 7.6p discount is expected to reduce the taxpayers shareholding in the bank to around 73%.

Around 60% of the bank's shares have been bought by hedge funds, reported the Guardian.

The UK government had bailed out RBS in 2008 during the global financial crisis by purchasing shares for £45bn and providing it with cheap funds.

The sale has drawn a lot of criticism from both Labour politicians and trade union officials who said that Chancellor of the Exchequer, George Osborne should have waited for the bank to strengthen its reform.

However, Osborne defended the move saying: "This is an important first step in returning the bank to private ownership, which is the right thing to do for the taxpayer and for British businesses: it will promote financial stability, lead to a more competitive banking sector, and support the interests of the wider economy.

"Now is the time for RBS to rebuild itself as a commercial bank, no longer reliant on the state, but serving the working people of Britain."


Image: The sale has reduced the government's stake in the bank to 73%. Photo: courtesy of HM Treasury/ gov.uk.