Chancellor Ready To Sell Off RBS At Loss


The Government is to sell its majority stake in RBS, which was rescued during the financial meltdown with £45.5bn of public money.Chancellor George Osborne said sales of the taxpayers’ 79% stake in the bank will begin in the coming months, and may take “some years” because of the size of the holding.


“It’s the right thing to do for British businesses and taxpayers,” he said at his annual Mansion House speech to business leaders in London.

“Yes, we may get a lower price than Labour paid for it. But the longer we wait, the higher the price the whole economy will pay.

“And when you take the banks in total, we’re making sure taxpayers get back billions more than they were forced to put in.”

Mr Osborne said the “decision point” was reached after an independent review concluded that taxpayers’ losses would be more than offset by profits on other bank share sales – including the stake in bailed-out Lloyds.

He said Rothschild estimated that if the RBS shares were sold in one go the loss to the taxpayer would be around £7.2bn.

However, that compares with an estimated overall profit of more than £14bn if all the Government’s remaining bank shares were sold – as against a forecast loss of between £20bn and £50bn at the time of the bail-outs.

RBS has reported a succession of massive losses, totalling nearly £50bn since its rescue seven years ago.

Its market value is around £23bn – half the amount the taxpayer put in.

Public cash has fared much better in Lloyds, which has seen its Treasury stake slashed from 43% to under 18%, with taxpayers getting back more than 50% of the £20.5bn put in.

Selling the Government’s stake in RBS would result in a total loss of between £13bn and £26bn, according to research by independent think-tank New Economics Foundation.

It described the sell-off as the “reckless fire-sale of a vital economic asset”.

Mr Osborne faces fierce criticism if the shares are sold at a discount.

The taxpayers’ investment in RBS – which took place between December 2008 and December 2009 – was made at an average price of 502p a share.

They closed down 0.38% at 351p on Wednesday.

Mr Osborne also confirmed that half of the Government’s remaining 30% stake in Royal Mail will be sold.

Bank of England Governor Mark Carney also addressed the City – saying the “age of irresponsibility” is over.

He set out new plans for rogue bankers and traders who break the law to be jailed for up to 10 years.

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