UK to sell stake in owner of Ulster Bank

THE British government has launched a sale of 925 million shares in Ulster Bank parent Royal Bank of Scotland (RBS) for around £2.6bn (€2.9bn) as it seeks to return the bank to private hands, the government unit managing its stake said yesterday.

As with sales of stakes in bailed out Irish banks, the RBS sale will crystallise a loss for the UK government.

It rescued RBS in 2008 at an average price of 502p a share. Those shares closed at 281p each yesterday.

UK taxpayers took a majority stake in RBS by pumping £45.5bn (€51.8bn) into the bank at the height of the financial crisis. About a third of the total rescue was used to prop up the bank’s Ulster Bank arm, which was left carrying massive losses on boom era real estate, commercial property loans and mortgages after the crash.

The sale of a 7.7pc stake is being managed by Morgan Stanley, Citigroup, Goldman Sachs and JPMorgan, UK Government Investments, which manages the country’s RBS holding, said.

Ahead of the sale, UK finance minister Philip Hammond had said he wanted to re-start a gradual sell down of the government’s 70pc stake in the bank some time before April 2019.

The government sold some shares in 2015 and took a £1.1bn (€1.25bn) loss.

Buyers are likely to include funds that already hold some of the 30pc of the bank owned through the stock market.

The opposition Labour Party is opposed to re-privatisation of the UK bank.

“All further sales of RBS shares should be halted, and the bank reorganised under public control,” the party’s John McDonnell said.