Osborne says 'right thing to do'
Chancellor confirms plans to start selling shares in RBS
He said he had received independent advice from the Bank of England and from investment bank Rothschild that it was in the interests of taxpayers to start selling the shares in the bank which was rescued at the height of the financial crisis.
“In the coming months we will begin to sell our stake in RBS. It’s the right thing to do for British businesses and British taxpayers,” Mr Osborne said in an annual speech to financiers in the City of London.”
“From bailing out the banks to bringing them back from the brink, now is the time for RBS to rebuild itself as a commercial bank no longer reliant on the state, but serving the working people of Britain,” Mr Osborne said, adding that it will take “some years” to sell the entire stake.
Bank of England Governor Mark Carney, speaking at the same event, backed the sale, saying in a letter to Mr Osborne that it was in the public interest to return RBS to private ownership.
Mr Carney said the move will “promote financial stability, a more competitive banking sector, and the interests of the wider economy” while avoiding “considerable net costs to taxpayers of further delaying the start of the sale”.
He said the move will “promote financial stability, a more competitive banking sector, and the interests of the wider economy” while avoiding “considerable net costs to taxpayers of further delaying the start of the sale”.
Chief executive Ross McEwan has overseen a turnaround at RBS since his appointment in 2013, returning the bank to profit in the first quarter of this year.
He said: “I welcome this evening’s announcement from the Chancellor and we are pushing ahead with our strategy to build a simpler, stronger, fairer bank that is totally focused on the needs of its customers and centred here in the UK. When the Government starts selling its shareholding, it will be selling a bank determined to be the best in the country.”
Shares in RBS closed on Wednesday at 351p, well below the government’s average buy-in price of 502p per share
Earlier this year, Mr Osborne said he would need a lot of persuading to sell the shares at a loss. But his party’s victory at the General Election has helped change his mind.
The governor also said “the age of irresponsibility is over” as he announced a clamp-down on abusive practices in financial markets after a string of scandals.