|
 The UK government sold a 5.4 percent stake in RBS at 330 pence per
share, a third below the price paid when Britain rescued the British
bank with 45.8 billion pounds of taxpayer cash at the peak of the
2007/09 financial crisis.
Britain raised 2.1 billion pounds, but lost a substantial sum on the
first of many blocks of shares to be sold. Overall it is currently
sitting on a 15 billion pound loss on its holding.
Finance Minister George Osborne hailed the start of returning RBS to
the private sector and said it was right to commence selling at a
loss.
"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,"
Osborne said.
But the opposition Labour Party slammed the sale.
"RBS had to be bailed out urgently, but it doesn’t have to be sold
off at the same speed," said Chris Leslie, shadow finance minister.
"The Chancellor needs to justify his haste in selling off a chunk of
RBS while the bank is still awaiting a U.S. settlement for the mis-selling
of sub-prime mortgages," Leslie added, referring to a potentially
massive fine from U.S. authorities against RBS, related to past
sales of U.S. mortgages.
RBS has set aside 2.1 billion pounds for a settlement but has said
the timing of a deal is uncertain. Analysts estimate it could cost
as much as 9 billion pounds.
However the share sale, which cuts the taxpayers' holding to 72.9
percent from 78.3 percent, still marks a milestone in Britain's
recovery from the financial crisis, as well as forming a plank in
Osborne's strategy to improve the country's finances.
MORE POWER
The divestment had been on the cards since Osborne in June
accelerated the timetable for selling RBS, after his Conservative
Party won May's UK national election with a surprise majority,
giving his party more power in government.
He has lost no time since then in pressing on with his plans for
Britain's economy, including the sale of more shares in Lloyds
Banking Group and a budget that included a shift away from welfare
spending to higher wages for workers.
UK Financial Investments, the body that holds the government's
stake, said it sold 630 million shares in a quick-fire sale to
institutional investors after the market closed on Monday.
[to top of second column] |
UKFI sold more shares than it had indicated on Monday, when it had
announced plans to sell 600 million. The 2.3 percent discount to
RBS's closing price on Monday, at which the shares were sold, was
also narrower than the 3.1 percent discount on the government's
first sale of Lloyds shares in September 2013.
By 0944 GMT (5:44 a.m. EDT) RBS shares were up 0.3 percent at
338.5p.
The RBS share sale was 2.4 times covered by investors, a person
familiar with the matter said, adding about 48 percent were UK-based
investors, 37 percent were from the United States and 15 percent
were from elsewhere.
RBS CEO Ross McEwan said he was pleased the sell-down had begun,
which he said reflected the progress the bank had made "to become a
stronger, simpler and fairer bank".
RBS was briefly the world's biggest bank by assets, but it has more
than halved its assets and the size of its investment bank and sold
businesses around the world.
Britain also had to rescue Lloyds and has sold down its stake in
that bank at a profit over the past two years and now holds less
than 14 percent. The taxpayer could make at least 2 billion pounds
on the Lloyds bailout.
The RBS sale was handled by Citigroup, Goldman Sachs, Morgan Stanley
<MS.N> and UBS <UBSG.VX>.
(Additional reporting by Sinead Cruise and William Schomberg;
Editing by David Holmes)
[© 2015 Thomson Reuters. All rights
reserved.] Copyright 2015 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
