UK government starts privatisation of Ulster Bank parent company RBS
Britain has sold a £2.1bn (€3bn) stake in Royal Bank of Scotland to kick off the disposal of its holding seven years after bailing out the bank.
Finance Minister George Osborne hailed the sale this morning as "an important first step in returning the bank to private ownership" and said it was right to start selling the stake at a loss to the price paid for the shares in 2008.
"While the easiest thing to do would be to duck the difficult decisions and leave RBS in state hands, the right thing to do for the economy and for taxpayers is to start selling off our stake," Osborne said.
"Now is the time for RBS to rebuild itself as a commercial bank, no longer reliant on the state, but serving the working people of Britain," he added.
Osborne said the proceeds would be used to pay down national debt.
UK Financial Investments, the body that holds the government's RBS stake, said it had sold 630 million shares, representing 5.4 percent of the bank, in a quick-fire sale to institutional investors after the market closed on Monday at 330 pence per share.
This was well under the 502p price paid by the government when it bailed out the bank at the height of the financial crisis. The taxpayer made a loss of around £1 billion on the sale.
UKFI sold more shares than it had indicated yesterday, when it had announced it planned to sell 600 million shares in the bank. RBS shares closed at 337.6p on Monday, so the shares were sold at a 2.3 percent discount.
Britain rescued RBS with £45.8bn of taxpayer cash at the peak of the credit crisis in 2008. The sale cut its holding to 72.9 percent from 78.3 percent.