HAMMOND: We live in the real world and will probably have to sell RBS shares at a loss

LONDON — The UK government may sell its shares in Royal Bank of Scotland for less than the price it paid for them during the 2008 financial crisis, Chancellor of the Exchequer Philip Hammond said.

Hammond signalled that he was prepared to offload the government’s stake in the bank, which has made a loss for nine consecutive years, for less than the 500p a share the Labour government paid at the time.

“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,” Hammond told MPs on Tuesday.

“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,” he said.

RBS shares are at 224p currently, less than half the price paid for them in the bailout.

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In 2015, former Chancellor George Osborne sold a 5.4% stake was sold at 330p per share, raising about £2 billion and cutting the government’s holding to 72.9% of RBS shares in total.

Hammond also said that the government would continue to wind down its stake in Lloyds, which received £20.3 billion ($US25.4 billion) of taxpayer assistance in 2008.

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 £12bn worth of Bradford & Bingley mortgages in a highly competitive process,” he said.

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