Monday 26 September 2016

UK takes £1bn hit on Osborne's sale of its stake in troubled RBS

Richard Partington

Published 05/08/2015 | 02:30

A worker sweeps in the foyer of a Royal Bank of Scotland office in the City of London in this file photo dated August 6, 2010. Britain started to return its holding in Royal Bank of Scotland to private investors on Monday, seven years after it bailed out t
A worker sweeps in the foyer of a Royal Bank of Scotland office in the City of London in this file photo dated August 6, 2010. Britain started to return its holding in Royal Bank of Scotland to private investors on Monday, seven years after it bailed out t

The UK government raised £2.1bn (€3bn) selling shares in Royal Bank of Scotland (RBS) yesterday at less than its bailout valuation.

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The disposal of a 5.4pc stake at 330 pence a share will cut British taxpayer's holding to 72.9pc, UK Financial Investments, which manages Britain's holdings in banks, said in a statement yesterday. The shares closed at 337.6 pence on Monday before the sale.

Chancellor of the Exchequer George Osborne took a loss of as much as £1.1bn on the sale as he tries to revive investor appetite in the bank, after it became Britain's biggest casualty of the 2008 financial crisis.

RBS still trades at less than the price paid in its £45bn bailout, after seven straight annual losses.

The bank has declined about 15pc this year, for the worst performance among European banks outside of Greece in a 46-member index.

"We are perplexed by the Chancellor's choice of timing," Ian Gordon, an analyst at Investec with a buy rating on stock, wrote in a note to clients. "Last night's disposal at 330 pence achieved a new 2015 low and arguably sold the taxpayer short." (Bloomberg)

Irish Independent

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