Government is primed to sell its stake in RBS

SPECULATION is growing that the Treasury is gearing up to sell its stake in RBS – and retail investors may be given the chance to snap up the shares cheaply.

It emerged yesterday that the bank is replacing its corporate brokers Morgan Stanley and UBS Group, fuelling the view that a sale of the Government’s 80pc stake in RBS will happen in 2015.

The process could take some months but the Treasury could sell a tranche of shares to retail investors. It is considering selling its stake in the bailed out bank at a loss to accelerate the disposal of the stock.

David Buik, market commentator at Panmure Gordon, said: ‘It would be sensible for 30pc-50pc to be sold to retail investors to create the right environment with the necessary momentum, but investors will need to be very, very patient.’

He expected the discount to be at 10pc to the current share price.

Chancellor George Osborne said earlier this year that a review of the stake in RBS would begin in the new Parliament.

UK Financial Investments, which manages the Government’s bank stakes, could then start to sell the shares later this year.

Experts expect it to follow the same process as Lloyds. Osborne has already y announced p plans to sell nearly £9bn worth of Lloyds shares in the next 12 months, including some at a discount to private retail investors.

Bankers also began a process of ‘drip-feeding’ Lloyds shares into the market last year, which will finish next month.

The Treasury has sold more than half its 40pc stake in Lloyds in the past two years.

Buik added: ‘There is of course going to be indigestion with a £9bn tranche of Lloyds and Williams & Glyn awaiting sale. The share price suggests some way off breaking even. So unless the taxpayer is going to take a massive loss, any sale will need to be handled dexterously.’

Shares were 502p when RBS was bailed out and the Government would need to sell shares at an average of 455p to not lose out.