Treasury to push back target date to sell off RBS stake
The Treasury is set to push back its target date for selling its stake in the Royal Bank of Scotland (RBS) in the wake of stock market uncertainty.
The government is due to announce tomorrow that it will not divest its 62 per cent stake in RBS until 2025.
An exit strategy the Treasury published in 2018 set a 2024 deadline to sell the taxpayer-owned shares.
The government bought a majority stake in the bank at the height of the financial crisis in 2008 as part of a bailout to save RBS from bankruptcy.
It paid 502p a share at the time to inject £45.5bn to rescue RBS.
A source close to the bank told Sky News it was not surprising the Treasury had chosen to delay selling off the rest of RBS in the wake of stock market volatility.
It has not sold off any of its stake in the bank since 2018, when it shed a 7.7 per cent stake at 271p per share.
However, the bank’s shares were today trading at 145.5p after a 2019 full of Brexit uncertainty and the recent coronavirus-related stock market turbulence.
Ongoing uncertainty about the spread of coronavirus and an oil price crash yesterday wiped £125bn off the UK’s biggest companies.
The FTSE 100 benchmark index slumped by 7.7 per cent yesterday in the largest one-day fall since the 2008 financial crisis.
Large losses were seen the world over, with Wall Street and Hong Kong’s Hang Seng falling by 7.7 and 5.07 per cent respectively.
RBS is also going through a rebranding phase under new chief executive Alison Rose, who has moved to reduce the company’s investment banking activities and cut costs.
Thousands of staff are expected to go, despite the bank exceeding profit expectations for 2019.
Rose has also said the company will change its name to Natwest in an attempt to distance RBS from its financial crash past.
Natwest became a subsidiary of RBS in 2000.
City PM has approached the Treasury and RBS for comment.