By Jonathan Davies
The Chancellor George Osborne says the government will look to sell its stake in the Royal Bank of Scotland (RBS) “as quickly as we can” if the Conservatives remain in power after the general election in May.
The taxpayer still owns 79% of the bank after the government was forced to provide it with a £45bn bailout package during the height of the financial crisis.
Business secretary Vince Cable tried to break-up the bank in 2012 but was blocked by George Osborne. Since the bailout, RBS has reported losses totalling £43bn, with the latest being £3.5bn in 2014.
Mr Osborne told the Financial Times that he felt “regret” for not reshaping RBS quicker. But he added that it could take years for the government to sell its entire stake in RBS, given its size.
Comparably, the government has sold roughly half of the stake it took in Lloyds Bank after bailing it out. But it took a 41% share and now owns less than a quarter of the bank.
“It’s not an exact science, but on some measures it’s bigger than all the privatisations of the 1980s put together,” he said. “Second, I think people want to see they get their money back. The British taxpayer wants to feel they haven’t suffered some enormous loss.
“So there are constraints around it, but it’s certainly something I would want to get moving on in the summer after the election. I would want to see a review on a plan for disposal.”
RBS shares closed at 373.4p, significantly lower than the 502p when it was bailed out. It means that if the bank cannot increase its share price by a large figure, the taxpayer is facing a loss on the £45bn injected into RBS.