Govt shares in RBS could be fully sold in next couple of years
(8 July 2015 – Britain) British Finance Minister George Osborne indicated the state’s stake in Royal Bank of Scotland (RBS) worth £16 billion (A$33.3 billion) within two years of a possible first sale in September.
Osborne said he wasn’t to begin reducing the stake in the coming months, but sources told Reuters the shares will be sold at a faster rate than previously expected, making it likely the government will take a substantial loss on initial sales.
Final decisions on Britain's biggest privatization have yet to be made and progress will depend upon RBS's performance, market conditions and ongoing investigations into past misconduct, the sources said.
Following a taxpayer bailout of £45.8 billion into RBS during the 2008 financial crisis left the government with a 78 percent stake.
RBS Chairman Philip Hampton, who is leaving the bank this year, and former CEO Stephen Hester had both said previously that it could take several years for RBS to return to private ownership, given the amount of shares to be sold.
The RBS revival has attracted interest from investors looking to benefit from Britain's economic recovery, including many in the United States, banking sector sources said.
Analysts expect the bank to have surplus capital by the end of 2016, offering the prospect of a high dividend yield in the longer term.
"Investors are really keen. They understand what RBS wants to be," one investment banker told Reuters.
"They are prepared to sit and wait. Pay up now for the prospect of a dividend in two to three years."
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