Osborne may sell RBS shares at a loss

George Osborne, pictured on the campaign trail
George Osborne, pictured on the campaign trail
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Britain may begin selling part of the state’s holding in Royal Bank of Scotland at a loss later this year, sources have claimed.

The Government wants to accelerate the disposal of its shares in RBS and Lloyds Banking Group, rescued at a combined cost to taxpayers of £66bn during the 2007-9 financial crisis.

It has already sold nearly half of its 41 per cent stake in Lloyds but has yet to start selling its 80 per cent stake in RBS, which received a £45.2bn state bailout.

The Conservative Party sees the sale of shares in bailed-out banks as a reflection of how it has turned around the country’s economic fortunes.

It has made a profit on its investment in Lloyds, but at current share prices it is sitting on a loss of £13.5 bn on its investment in RBS.

Sources told Reuters that Chancellor George Osborne is open to the idea of beginning to sell RBS shares at a loss later this year.

They said he plans to launch an independent review of the matter in the coming weeks.

Mr Osborne said in January that the party would review what to do with the Government’s RBS stake early in the new parliament.

At that time, he said he would need a lot of persuading to give up on the principle that the Government would at least get its money back.

The Sunday Times reported that sources at RBS said the “mood music” from the Treasury had changed in recent months and officials were warming to the idea of allowing a partial stake to be sold at a loss.

That could result in UK Financial Investments (UKFI), which manages the Government’s stake, starting to sell the shares later this year.

Mr Osborne has already said he plans to sell nearly £9bn worth of Lloyds shares in the next 12 months, including some at a discount to private retail investors.

RBS Chief Executive Ross McEwan said in March that he believed the Government could start selling RBS shares early in the next parliament.

A Treasury spokesman said he had no further information to provide on the sale. RBS declined to comment.