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When will the Government sell off its stake in RBS?

George Osborne says he wants to 'get rid' as soon as possible after the election.

by Jack Torrance
Last Updated: 05 May 2015

How to solve a problem like RBS? The embattled bank has been sitting on the Government's books since 2008, creating embarrassment for politicians with news of 'big banker bonuses' and scandal after scandal.

Unlike its fellow bail-out beneficiary Lloyds, its shares haven't been something investors have been keen to lap up - and the scale of its problems require much more a tidy up. But it emerged today that George Osborne admitted he'd made a mistake in not restructuring the bank after taking power and said he wants to 'get rid' of the the bank as soon as possible – and who could blame him? 

'When I say "get rid of it", I mean put it into the good hands of the private sector,' the chancellor said in an interview with the FT, adding that the sale could take a long time to pull off. 'First, it’s not an exact science, but on some measures it’s bigger than all the privatisations of the 1980s put together.

'Second, I think people want to see they get their money back. The British taxpayer wants to feel they haven’t suffered some enormous loss.' That might be tricky given the bank's current share price of around 379p – he would need to sell for 455p per share for the Government to even break even on the bailout. Last week the bank reported its seventh successive annual loss so it's little wonder the share price is still well below where it was.

Nonetheless, Osborne says he wants to get moving on the sale straight after the election. Of course he would only be in a position to do so if he's still chancellor come June. Given the shakiness of opinion polls ahead of May's election, that's looking far from certain.

Then again, whoever takes power is unlikely to want the bank hanging around their neck for long. It would certainly be an amusing twist of fate if, given the post-election balance of power, SNP leader Nicola Sturgeon had the final say about what price at which it should be let go. 

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