Government to sell off RBS at a loss
RBS was rescued from the financial meltdown which affected the whole of the Western world, with £45.5bn of public money. The 79% stake that us taxpayers have will be sold in the coming months, most likely at a loss.
At his annual speech at Mansion House, George Osborne said: "It's the right thing to do for British businesses and taxpayers. Yes, we may get a lower price than Labour paid for it. But the longer we wait, the higher the price the whole economy will pay."
Boom! There it is! Although, that was quite a gentle dig from the Chancellor, so he must be mellowing. He continued: "And when you take the banks in total, we're making sure taxpayers get back billions more than they were forced to put in."
Seems like the Government are tired of messing around with the sale of the banks involved, and they just want to get the whole thing done so they can focus on other things. The official line is that Osborne reached the "decision point" after a review concluded that taxpayers' losses would be more than offset by profits on other bank share sales.
Either way, if this works out, the estimated profit on all this will be in advance of £14bn, which is better than a loss of between £20bn and £50bn, which was forecast at the time of the bail-outs. The problem with RBS is that their market value is somewhere in the region of £23bn, which is half the amount taxpayers put in.
However, the estimates aren't universally agreed upon, with the New Economics Foundation saying that selling the Government's stake in RBS will result in a total loss of between £13bn and £26bn. They described the sell-off as the "reckless fire-sale of a vital economic asset".
There's going to be hell to pay if the RBS sale goes off cheaply, like the Royal Mail shares debacle. We'll just have to wait and see.