George Osborne sold off a 79% stake in the bailed-out bank in August at a £1bn loss. Now outgoing treasury head, Sir Nick MacPherson, has said the government may also fail to break-even on the sale of its remaining stake but if it stays with the state, it will impact on the economy.
MacPherson told the Financial Times that it would be “tricky” for the government to sell its £19.2bn stake before the next election but that getting RBS back into the private sector would ‘in the long term, mean growth for the British economy’. He said that a judgement would have to be made on whether the shares should be sold below the £5.02 paid by the taxpayer in the 2008 bailout.
“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,” he said.
Earlier this year, a shadow of doubt was already cast over the Chancellor’s aim to receive almost £30bn from the sale by the end of this parliament in 2020, with data from the Office for Budget Responsibility (OBR) estimating a £23bn loss on the shares at current prices.
Today’s redundancy announcement at the bank means it will have cut 1,500 UK jobs this year.