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Govt to net £2.1bn through RBS share sell-off

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The Government has announced plans to sell 5.2 per cent of its holding in RBS to institutional investors.

The sale will take place through UK Financial Investments, which holds a 78.3 per cent stake in the bank.

The Government has recruited Citigroup, Goldman Sachs, Morgan Stanley and UBS to act as bookrunners for the sale, with shares offered at 330p per share.

The bank was bailed out in 2008 and 2009, with the Government buying shares at almost 500p.

The £2.1bn raised will be used to pay down the national debt.

Chancellor George Osborne says: “This is 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: it will promote financial stability, lead to a more competitive banking sector, and support the interests of the wider economy.

“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.

“I wasn’t the Chancellor who bailed out RBS; but I am the Chancellor now responsible for doing the right thing for the British economy. So while the easiest thing to do would be to duck the difficult decisions and leave RBS in state hands; the right thing to do for the economy and for taxpayers is to start selling off our stake. So today that’s what we’re doing.”

However, Labour shadow chancellor Chris Leslie says the decision to sell at 330p will mean a loss to the taxpayer of up to £1bn.  

“Taxpayers who bailed out RBS and who have now lost out will want to know why the Government has sold these shares at a discount and while the bank is still awaiting a US settlement for the mis-selling of subprime mortgages,” Leslie says. 

“Getting back the taxpayers’ money is not an impossible objective and the Chancellor is dismissing this too lightly.” 

The announcement comes after the Government confirmed that it has raised almost £14bn from disposals of its holding in Lloyds Bank.

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