Chancellor George Osborne may be forced to sell the public stake in Royal Bank of Scotland at a loss because maintaining its state ownership would be bad for the bank and the economy, the outgoing head of the Treasury says.
In an interview with the FT, Sir Nick McPherson said it will be “tricky” for the state to sell all of its £19.2bn stake in RBS prior to the next election.
He argued getting the bank back into the private sector will boost lending: “That, I think, in the long term means growth for the British economy.
“My one experience of running banks is that the longer they stay in the public sector, the greater the likelihood that you will lose value.”
Asked whether there was a case for selling the rest of the state’s shares below the £5.02 price paid by the taxpayer in the RBS rescue of 2008, he said: “I think that is the judgment which will have to be made.”
The Treasury told the FT it is “determined to return RBS to the private sector” but did not say whether it would be at a profit.