TAXPAYERS have lost more than £2.1 billion after the UK Government sold a 7.7% stake in Royal Bank of Scotland at 271p per share – after paying an average of 502p per share when it bailed out the lender during the financial crisis.
The sale of around 925 million shares, which will bring the public holding in RBS down from 70.1% to 62.4%, has been branded as a “bargain basement betrayal” of the public purse.
Rob MacGregor, national officer for the Unite union, said: “The government is attempting to wash its hands with Royal Bank of Scotland at the expense of the taxpayer.
“This bargain basement sale of over 7% of the bank’s shares is a betrayal of public finances and represents a total loss of over £3bn for taxpayers since the original bail-out in 2008.
“Staff are clear that the government should be focusing its attentions on keeping RBS bank branches open and improving the corporate governance of this institution.
“The catalogue of failures across the bank ranging from thousands of staff cuts, closing hundreds of bank branches and also the sale of financial products which resulted in the $4.9bn US fine demonstrates the systematic failures by the management to effectively run this organisation.
“Staff across the business are continuing to pay for the mistakes at the top whilst the government merely looks the other way.”
The £2.1bn loss to the UK taxpayer is expected to balloon to around £26.2bn as the government hopes to have sold off around two-thirds of its stake by 2023.
It bought a stake in the bank for £45bn in 2008 as part of a bailout at the height of the financial meltdown.
This week’s share sale is the first time that government holdings in RBS have been offloaded since 2015.
The bank’s chief executive, Ross McEwan, said: “I am pleased that the government has decided the time is now right to restart the share sale process. 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.”
Chancellor Philip Hammond said the sale was also a “significant step in putting the financial crisis behind us”.
He said: “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.”
RBS shares slumped in the wake of the news, at one point by more than 5% during afternoon trading.
Alasdair Ronald, senior investment manager at Brewin Dolphin Glasgow, said: “The bank is now completely different from what it was just over 10 years ago, and the share price won’t return to its pre-financial crisis highs in the foreseeable future.”
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