Government could sell half its RBS stake within two years to raise £16bn
The government could sell half of its stake in Royal Bank of Scotland (RBS) within two years, raising £16bn in the process.
Read more: RBS' share price falls as it could face $13bn penalty over mortgage-backed securities
The Chancellor of the exchequer George Osborne announced last month it would begin to sell off a stake in the bailed-out bank this year however the pace of the sale could be quicker than first expected.
Reuters is reporting today that people close to the government have indicated it will start the sale as soon as September and has plans to shed 50 per cent of its overall stake.
Since the government's £45.8bn bailout in 2008, RBS shares have plummeted in value meaning the British taxpayer stands to make a loss from any share sale at current market prices.
When announcing his plans Osborne estimated the government would make a £7.2bn loss but cited a report from advisory firm Rothschild which suggested this would be cushioned by gains made from other state-owned assets such as Lloyds and credit guarantee scheme fees. The Chancellor said starting the RBS sell-off was "the right thing to do".
Goldman Sachs has been hired as the privatisation adviser to UK Financial Investments, which is tasked with managing taxpayer stakes across the economy.
The Treasury declined to comment when contacted by City A.M.
Shares in RBS are down over 2.5 per cent today, trading at a price of around 349.08.
