James Tidwell June 7, 2018
UK Govt. Plans To Reduce Its Stake In RBS...Sells 7.7% Shares

The government of the UK has decided to sell 7.7% stakes to the Royal Bank of Scotland, which will reduce the holding in the said bank from 70.1% to 62.4%. The current statistics will include selling of 925 million shares, which will add up to £2.6 billion to the account.

In the RBS, the government has 8.4 billion shares, which amounted to 281.1p during the closing on Monday. As per the present amount, the value to the bank is £33.8 billion.

The disposal will be carried out by the end of this week. The process will be managed by the investment banks like Citigroup, Morgan Stanley, JP Morgan, and Goldman Sachs. The government has further added, by 2023 it will sell off shares worth £15 billion. On the contrary, John McDonnell, the Shadow Chancellor of Labor has stated that the sale plan of the government will not contribute to the economic benefit of the country.

The Senior Analyst of Hargreaves Lansdown, Laith Khalaf has also stated that the share prices associated with the RBS have rebounded from the low-slung level caused after the election of the EU. However, the taxpayers will be at a loss in spite of the hiked share prices as the government has decided to sell the stakes.

He further added that the RBS has helped clear several restrictions, which has contributed to the unblocking of the path that intended towards the re-privatization.

The selling of the shares is good news for the private investors in RBS as this is the initiation towards transforming into a normal bank. However, the government sales may negatively affect the price of the shares.

The bank had posted the annual profit in February, which was £752 million. This was a huge transformation as the previous year recorded a loss of £6.95 billion.

James Tidwell

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