£15bn RBS share sale will begin by 2019

BAILED-OUT Royal Bank of Scotland is finally being sold back to private owners – a decade after it was saved in the financial crisis.

The Treasury stumped up £46bn of taxpayers’ money in 2008 to prevent catastrophe at RBS, which came within hours of going bust.

Almost a decade later, the Natwest owner is still losing money every year and the public’s 71pc stake is worth just £23.7bn. Chancellor Philip Hammond yesterday announced he would start selling shares by March 2019, even though he is unlikely to get back what was spent on the rescue.

It means RBS will have been publicly owned for around a decade – longer than expected when the Labour government decided to nationalise it.

A share sale is not seen as possible before RBS settles a longawaited US fine for mis-selling toxic mortgage debt, which some analysts fear could be as large as £9bn.

Bosses at the bank hope to have reached an agreement over this bill by the end of the year, paving the way for a return to private ownership.

Critics have long argued that the lender would be better off outside Government control, enabling it to recover more rapidly and compete with rivals on a level playing field.

But unless shares stage an almost unprecedented recovery, taxpayers will lose billions when the stock is offloaded.

The Office for Budget Responsibility watchdog estimates the state is £26.2bn in the red after saving the stricken bank.

The Treasury said that it intends to sell £15bn of stock in sales beginning by March 2019, about two-thirds of its remaining shares in RBS.

Shares in the bank dipped 1.4pc, or 3.7p, to 269.5p.