The Chancellor of the UK Government, Philip Hammond has told members of the UK houses of Parliament, that it is highly likely that the UK Government will be forced to sell it’s stake in the Royal Bank Of Scotland at a loss.
Mr Hammond said that it was necessary for people to “live in the real world” in regards to the Government selling-off it’s shares in the bank at a price that would attract buyers.
In 2008, the UK government, which was headed at that time by the Labour party was forced by the worldwide financial crisis that happened during 2008, to purchase nearly £45 billion in stock in the Royal Bank Of Scotland – in order to help the bank to avoid going under.
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Mr Hammond has previously said the government did not expect to offload its 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 £12bn worth of Bradford & Bingley mortgages in a highly competitive process.”
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It is understood that the Treasury will only start to sell its shares in RBS when “legacy” issues have been resolved.
Ninth consecutive loss
Those issues include a potentially huge fine by the US Department of Justice, which is pursuing the bank over the sale of mortgage-backed securities before the financial crisis.
In February, RBS posted its ninth consecutive annual loss, with much of the £7bn accounted for by setting aside £5.9bn for fines and legal costs.