RBS share price slumps as boss Ross McEwan welcomes government share selloff as Labour and Lib Dems question process

RBS boss Ross McEwan has said it is “the right time to re-start the share sale process” after it emerged the government was offloading a further 7.7 per cent overnight.

Chancellor Philip Hammond was advised yesterday to start the process by UK Government Investments (UKGI), the corporate finance arm of the government responsible for managing its stake in the bank, which it has held since bailing it out during the financial crisis.

RBS shares were sold at 271p each, raising £2.5bn for taxpayers – notching up a loss on the average 502p per share from the £45bn 2008 bailout.

Almost three years ago, then-chancellor George Osborne sold RBS shares at 330p and was accused of a “fire sale”.

RBS’ share price fell more than three per cent in early morning trade.

This morning chief executive McEwan said: ​“I am pleased that the government has decided the time is now right to re-start the share sale process

“This is an important moment for RBS and an important step in returning the bank to private ownership.

“It also reflects the progress we have made in building a much simpler, safer bank that is focused on delivering for its customers and its shareholders.”

Chancellor Philip Hammond added: “This sale represents a significant step in returning RBS to full private ownership and putting the financial crisis behind us.

“The government should not be in the business of owning banks. The proceeds of this sale will go towards reducing our national debt – this is the right thing to do for taxpayers as we build an economy that is fit for the future.”

But the news has prompted criticism from the opposition benches, with shadow chancellor John McDonnell blasting the move.

“There is no economic justification for this sell-off of RBS shares,” he said. “There should be no sales of RBS shares, full-stop. But because of this government’s obsession with privatisation, the taxpayers who bailed out the bank will now incur an enormous loss.”

Liberal Democrat leader Vince Cable agreed. “The Conservatives should not be offloading these shares at such a huge loss – there is no urgency for this sale,” he said.

“It is much more important that, as the biggest shareholder, the government puts pressure on the management at RBS to get their house in order so that the share price is maximised and taxpayers get the value for money they deserve for rescuing the bank in the first place.”

The sell-off will reduce the Treasury’s stake in RBS to 62.4 per cent.