Government to ‘FINALLY sell taxpayers’ RBS stake’ – a DECADE after £45.5BILLION bailout | City & Business | Finance

Government to ‘FINALLY sell taxpayers’ RBS stake’ – a DECADE after £45.5BILLION bailout | City & Business | Finance

City analysts predict that the Conservative Government is looking for around £3 billion and could sell up to 10 percent of the recovering bank.

The UK’s square mile – considered a global finance capital – is “awash with speculation” that the UK government is set to finally test the Market appetite for shares in RBS according to Sky news reports.

City bankers and Investors are braced to see a return on the taxpayers’ 70.5 percent after being controversially bailed out as the true extent of the 2008 Financial Crisis took hold in 2008.

RBS chiefs will meet for the banks’ annual general meeting on Wednesday, however it is not yet known if the sale decision will take place before, during or after the meeting.

Chancellor Philip Hammond has the final say and will follow advice from UK Government Investments‎ (UKGI) to make sure that the UK taxpayers get the best possible deal for the bank they paid to save. However, even with the best possible sale, UK taxpayers are expected to book a massive loss on the £45.5 billion paid to bail out RBS since the crisis.

The final concern for Mr Hammond and the Treasury was, until last month, the total cost of settling with the US Department of Justice (DoJ) relating to the mis-selling of mortgage bonds before the financial crisis. However, with fears that RBS would need to pay out tens of billions to settle in the US, the actual figure of £3.6 billion came as a massive relief and the move to start reducing the taxpayers’ stake in RBS comes as no surprise.

Shares in the bank closed at 289.7p on Friday, giving RBS a Market capitalisation of £34.8 billion with the UK the taxpayer’s stake worth just under £24.5 billion.

RBS was famously rescued from collapse with capital injections from the Treasury totalling £45.5 billion at an average share price of 502p.

As the total worth of the bank has diminished over time, Mr Hammond will have to justify why he is selling shares below the 330p price at which his predecessor, George Osborne, offloaded a 5.4 percent stake in RBS in August 2015.

Disappointingly for taxpayers, there is absolutely no chance the government can recoup the £45.5 billion bailout funds made to secure the bank following the series of radical changes that RBS has undergone since 2008.

On whether or not the lessons from the Financial Crisis have been learnt, Adrian Ash, director of research at BullionVault told in an article on the ten-year anniversary of the 2008 Financial Crisis that Britain is now lumbered with record-high national debt, half of which has amassed in the 10 years since the crisis began.

On the needs for bank bailouts by the taxpayer like Northern Rock and RBS, he said: “No-one’s learned anything. Regulators are fighting the last war, central banks have inflated new bubbles, and Investors are blindly chasing returns, each hoping they’ll be first through the door when everyone runs for the exit.

“Incredibly, savers still imagine this system exists to protect them.”


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