Ross McEwan, the boss of RBS, has said that it is “the right time to re-start the share sale process” after it was revealed that the government was offloading an additional 7.7 percent overnight.
Yesterday, Philip Hammond, the British Chancellor, was advised to begin the process by the corporate finance arm of the government that is responsible for managing its stake in the bank, the UK Government Investments (UKGI), which it has maintained since bailing it out during the financial crisis.
The shares of RBS were sold at 271p per share, raising £2.5bn for the taxpayers – notching up a loss on the average of 502p per share from the £45bn bailout of 2008.
Nearly three years ago, George Osborne, the then-chancellor, sold the shares of RBS at 330p. He was accused of a “fire sale.”
The share price of RBS dropped by more than three percent during early morning trade.
Chief executive McEwan stated: “I am pleased that the government has decided the time is now right to re-start the share sale process.”
He added: “This is an important moment for RBS and an important step in returning the bank to private ownership.
“It also reflects the progress we have made in building a much simpler, safer bank that is focused on delivering for its customers and its shareholders.”
Philip Hammond stated: “This sale represents a significant step in returning RBS to full private ownership and putting the financial crisis behind us.
He added: “The government should not be in the business of owning banks. The proceeds of this sale will go towards reducing our national debt – this is the right thing to do for taxpayers as we build an economy that is fit for the future.”
However, the said news has provoked criticism from the opposition benches, with John McDonnell, the shadow chancellor, criticising the move.
McDonnell stated: “There is no economic justification for this sell-off of RBS shares.
He added: “There should be no sales of RBS shares, full-stop. But because of this government’s obsession with privatisation, the taxpayers who bailed out the bank will now incur an enormous loss.”
Vince Cable, the Liberal Democrat leader, agreed. He stated: “The Conservatives should not be offloading these shares at such a huge loss – there is no urgency for this sale.”
He added: “It is much more important that, as the biggest shareholder, the government puts pressure on the management at RBS to get their house in order so that the share price is maximised and taxpayers get the value for money they deserve for rescuing the bank in the first place.”
The said sell-off will reduce the stake of the Treasury in RBS to 62.4 percent.