Trea­sury set to off­load 925 mil­lion RBS shares

Belfast Telegraph - Business Telegraph - - News - BY RAVENDER SEMBHY

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”.

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