Government willing to sell stake in RBS at a loss, says Chancellor
Philip Hammond has admitted that the Government is prepared to sell its stake in Royal Bank of Scotland (RBS) at a loss to the public purse.
The Government bought its 72% stake in the bank for £45 billion in 2008, at £5.02 a share, as part of a bailout at the height of the financial crisis.
But shares in the troubled lender are now trading at less than half that price at £2.23.
The Chancellor said on Tuesday: "The Government is not at present actively marketing its stake in RBS.
"Our policy remains to return the bank to private hands as soon as we can achieve fair value for the shares, recognising that fair value could well be below what the previous government paid for them.
"We have to live in the real world and make decisions on the future of our holding in RBS in the best interests of taxpayers."
It is understood that only once RBS' legacy issues - such as fines in the US and state aid obligations - are dealt with, will the Government begin selling down the taxpayers' stake.
In February, RBS racked up its ninth consecutive year of annual losses, ending 2016 £7 billion in the red and announcing a major cost-cutting drive expected to result in large-scale job losses.
In addition, the European Commission has launched an in-depth probe into Government proposals which aim to spare RBS from being forced to sell off the Williams & Glyn branch network.
Mr Hammond has previously said the Government does not expect to offload its 72% stake in RBS until after 2020.
He added: "We are making real progress in realising our holdings in the banking sector. We continue the programme sale of our shareholding in Lloyds, which is now down from 43% to less than 2%, and just last month we sold £12 billion worth of Bradford & Bingley mortgages in a highly competitive process."