U.K. Plans to Sell $20 Billion of RBS Shares Over Five YearsBy
Government to start program to divest stake by March 2019
Two thirds of taxpayer holding to be sold over period
The U.K. government plans to kick-start the sale of its Royal Bank of Scotland Group Plc stake by divesting 3 billion pounds ($4 billion) of shares by the end of March 2019.
The state will sell about 15 billion pounds of stock over five years in equal portions, representing two thirds of its 71 percent stake, according to the Treasury’s Budget document released Wednesday.
“RBS has made significant progress on resolving its legacy issues,” according to the document released alongside U.K. Chancellor of the Exchequer Philip Hammond’s Autumn Budget. “It remains the government’s objective to return the bank fully to the private sector when it represents value for money to do so and market conditions allow.”
Chief Executive Officer Ross McEwan has said he’s optimistic the Edinburgh-based bank can reach a settlement with the U.S. Department of Justice over a mortgage-bond probe before the end of the year. That would remove the biggest remaining obstacle to the bank restoring dividends, enticing investors to buy the government shares acquired as RBS obtained a 45.5 billion-pound bailout during the financial crisis.
Hammond has indicated he doesn’t expect to sell the taxpayer’s stake at a profit, which is calculated in the government’s accounts at anything above 407 pence a share. The stock currently trades at 270.8 pence apiece.
The government fully exited its shareholding in Lloyds Banking Group Plc, Britain’s largest mortgage lender, in May this year.