Treasury set to offload 925 million RBS shares
THE Government has announced that it will offload a £2.6bn stake in Ulster Bank parent company Royal Bank of Scotland, a move that will see the taxpayer’s stake in the lender reduced from 70.1% to 62.4%.
UK Government Investments, which manages the state’s stake in the lender, said it will sell approximately 7.7%, or 925 million shares, to institutional investors.
It is the first time that shares in RBS have been offloaded since 2015.
“UK Government Investments advised the Chancellor it would be appropriate to conduct the second sale of the Government’s shareholding in the Royal Bank of Scotland,” the Treasury said in a statement.
“The Chancellor agreed with that advice and has authorised the process to begin. RBS recently agreed a $4.9bn (£3.6bn) settlement with US regulators, which removed a major hurdle to the bank’s return to private hands,” it added.
The Government hopes to sell £15bn worth of shares by 2023, which is about two-thirds of its stake.
But it is facing a near-£26.2bn loss on its holding, with the lender’s shares languishing well below the average 502p share price paid during the crisis era bailout, at around 280p.
The Government bought its stake in the bank for £45bn in 2008 as part of a bailout at the height of the financial crisis.
Only last week, RBS’S outgoing finance chief Ewen Stevenson said the recent slump in European stocks might be a cause for pause for the Government.
Earlier this year, RBS reported a bottom-line profit for the first time in a decade.
Laith Khalaf, senior analyst at Hargreaves Lansdown, said that the cost of the Government intervention “is now starting to emerge”.