Britain presses RBS privatisation with share sale
[LONDON] Britain announced Monday the resumption of the privatisation of the Royal Bank of Scotland, which was rescued with taxpayers' cash at the height of the global financial crisis.
The government said a 7.7-per cent slice in Edinburgh-based RBS will be off-loaded, trimming its total holding from 70.1 per cent to 62.4 per cent.
UK Government Investments (UKGI), which manages the stake, said it expected to sell 925 million shares to institutional investors for an undisclosed amount, after chancellor (finance minister) Philip Hammond gave the green light.
The stake is worth £2.6 billion (S$4.7 billion) at the current share price.
"UKGI today advised the Chancellor it would be appropriate to conduct the second sale of the government's shareholding in the Royal Bank of Scotland," the Treasury said in a statement.
"The Chancellor agreed with that advice and has authorised the process to begin."
Troubled RBS was rescued with £45.5 billion of taxpayers' cash during the global financial crisis in the world's biggest banking bailout.
The government had decided in 2015 to start selling a chunk of its stake of about 80 percent in RBS but the plan was carried out only partially owing to the lender's low share price.
In November 2017, the government said it would recommence RBS privatisation by March 2019.
Under the plan, the government aims to sell two-thirds of its stake for roughly £15.0 billion over a five-year period.
Last year, RBS had posted its first annual bottom-line profit since 2007, following a huge drop in litigation costs.
The bank was meanwhile fined US$4.9 billion last month by the US Justice Department over its role in the sub-prime crisis.
However RBS described the penalty - which was less than analysts had feared - as a "milestone moment" which removed uncertainty over the group.
Like other banks, RBS had packaged toxic US sub-prime mortgages into risky financial derivatives and sold them to customers, a practice that helped trigger the 2008 housing meltdown and subsequent global recession.
AFP
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