RBS to be sold for £7.2bn loss

Chancellor confirms plans to offload stake at a cost of £240 to every taxpayer

Updated: 
George Osborne Attends The Bankers And Merchants Dinner
George Osborne: Government to Sell Off Stake in RBS

Chancellor George Osborne has risked stoking public anger over the banking sector bailouts after he announced plans to start selling of the government's stake in RBS for a substantial loss.

Following the financial crash in 2008, the government purchased a 78% stake in RBS at a cost of £45.8 billion.

With shares currently trading at £3.50, it means the government stands to recoup £32.4 billion from the sale, leaving the taxpayer more than £13 billion out of pocket. The Daily Mail estimates that this figure will fall to just over £7 billion - £240 per taxpayer - once you factor in dividends and fees paid out by the bank.

It's worth noting that, despite this loss, an independent report has estimated that the government still stands to make a surplus of £14.3 billion on its overall investment in the various banks bailed out in the wake of the financial crash, including Lloyds, Northern Rock and B&B.

"The right decision"

In his Mansion House speech last night, the chancellor defended his sale plans, insisting both the economy and taxpayers would be worse off if he waited any longer.

"It's the right thing to do for British businesses and British taxpayers. Yes, we may get a lower price than Labour paid for it.

"But the longer we wait, the higher the price the whole economy will pay. And when you take the banks in total, we're making sure taxpayers get back billions more than they were forced to put in.

"From bailing out the banks to bringing them back from the brink, 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."

Could you buy shares?

It's expected that the majority of shares will be snapped up by the major financial institutions in the coming months.

However, the chancellor suggested shares could also be offered to the public, similar to the 'Tell Sid' sell-offs in the 80s. Further details of this plan have yet to be released.
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