Treasury sells £2.5billion stake in Royal Bank of Scotland

A £2.5billion stake of bailed-out Royal Bank of Scotland has been sold in a bid to end a decade of state ownership.

City investors bought a 7.7 per cent stake from the Treasury last night, triggering a £2.1billion loss for taxpayers. 

It is a major milestone as ministers seek to draw a line under the financial crisis.

A £2.5billion stake of bailed-out Royal Bank of Scotland is being sold in a bid to end a decade of state ownership

Taxpayers paid £5.02 per share in 2008 but the stock price continued falling and has not been close to this level since 2010. The price for the latest sell-off was £2.71, the UK Government Investments (UKGI) confirmed last night. 

The sale takes the state’s stake in NatWest owner RBS down from 70.1 per cent to 62.4 per cent. 

And it is likely to be the start of a sustained sell-off, finally returning the bank to private ownership.

RBS was forced to beg the Treasury for a bailout after an ill-advised takeover of toxic Dutch rival ABN Amro which briefly made it the world’s largest bank. 

Taxpayers stumped up £46billion to stabilise the lender and stop it running out of cash, in a collapse that would likely have taken the British economy down with it.

RBS chief executive Ross McEwan said: ‘I am pleased that the Government has decided the time is now right to restart the share sale process.

RBS was forced to beg the Treasury for a bailout after an ill-advised takeover of toxic Dutch rival ABN Amro

RBS was forced to beg the Treasury for a bailout after an ill-advised takeover of toxic Dutch rival ABN Amro

‘This is an important moment for RBS and an important step in returning the bank to private ownership.

‘It also reflects the progress we have made in building a much simpler, safer bank that is focused on delivering for its customers and its shareholders.’

Neil Wilson, chief analyst at Markets.com, said the bank had ‘turned a corner’. 

‘[…] the settling of the DoJ case was key, removing the last big overhang and paving the way for the government to sell off its stock and for dividends to return. As predicted, Philip Hammond has not lost time is moving to cash in his chips ahead of what could be a tumultuous summer for Brexit negotiations.

‘That settlement also paves the way for a quick return to annual profits after ten years of losses – dividends will once again start flowing.’ 



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