Britain begins sale of stake in Royal Bank of Scotland

Britain's Government on Tuesday began selling its majority stake in Royal Bank of Scotland, which was rescued with the world's biggest banking bailout at the height of the financial crisis. The Government has sold at a loss 5.4 per cent of RBS for 3.3 billion dollars to reduce state debt and kick-start the lender's full return to the private sector.

Edinburgh-based Royal Bank of Scotland was rescued with £45.5 billion of public money in 2008. RBS has since reported losses totalling about £50 billion and has axed more than 30,000 jobs, with thousands more reportedly set to follow.“The Government has today begun the process of selling its shares in the Royal Bank of Scotland. It has sold 5.4 percent of the bank at a price of 330p per share,” the Treasury said today.

“The 2.1 billion pounds raised from the sale will be used to pay down the national debt.” But with the state having bailed out RBS at a cost of 500 pence a share, the taxpayer has taken a hit on the sale totalling about 1.0 billion dollars. Finance minister George Osborne insisted that the move was “an important first step in returning the bank to private ownership, which is the right thing to do for the taxpayer and for British businesses.”

He said the move would “promote financial stability, lead to a more competitive banking sector, and support the interests of the wider economy.”Back in February, Royal Bank of Scotland said it would end investment banking in the Middle East and Africa and significantly reduce its presence in Asia and the US after a seventh straight annual loss for 2014. But it recorded a 27 per cent rise in net profits for the second quarter of this year.