UK government planning to halve RBS stake in two years
The British government is planning to sell half its stake in Royal Bank of Scotland (RBS), worth around £16bn (€22.5bn), within two years of a possible first sale in September, according to people with knowledge of government thinking.
UK Chancellor George Osborne said last month he wanted to start selling the government's €32bn stake in RBS - which owns Ulster Bank here - in the coming months, with initial sales likely to result in a loss for taxpayers.
The aggressive plan for Britain's biggest ever privatisation means the shares will be sold at a faster rate than anticipated, and makes it likely the government will make a substantial loss on the initial sales of its shares.
Final decisions on the sale process have yet to be made and progress will depend upon RBS's performance, ongoing investigations into past misconduct, and market conditions, the sources said.
Britain pumped £45.8bn (€64.6bn) into RBS to rescue it during the 2007-9 financial crisis, leaving the state with a a 78pc stake in the bank. About a third of the total rescue went into propping up Ulster Bank. UK taxpayers are now sitting on a loss of £14bn (€19.7bn).
RBS Chairman Philip Hampton, who is leaving the bank later this year, said in June he expected it to take several years for the government to complete the sale, while former chief executive Stephen Hester said it could take a decade.
Although Osborne had been reluctant to sell shares in RBS at a loss, the bank's improving performance has persuaded him now is the time to sell. A majority win for his Conservative party in a general election in May also means he has more political leeway to sell. (Reuters)