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Bank sale hit by Brexit

Royal Bank ‘privatisation delayed by two years’ says CEO

Ross McEwan neutralRoyal Bank of Scotland’s return into private ownership has been delayed “by at least a couple of years” as a result of the Brexit vote, says its chief executive,.

The sharp share price fall since the EU referendum means there is little likelihood of the government launching a sale of shares to the public any time soon.

Shares in the bank have fallen 32% from 250.5p prior to the EU vote to around 170p.

Ross McEwan, who took part in a phone-in with radio station LBC, said that it is possible the situation could change.

“Markets can turn positive as quickly as they turn negative,” he said.

The government paid an average of 502p for the shares when it bailed out RBS in 2008 and 2009.

George Osborne, the Chancellor, last year sold just over £2bn of stock to cut the Treasury’s stake from 78% to 73%.

The sale made a loss of £1.1bn, though it was hoped that the process would encourage buyers into the market and that by increasing liquidity if the stock it would help stimulate the price.

Since then, however, the share price has fallen steadily and it is not clear when the next tranche can or will be sold.

Mr McEwan also warned today of the need to maintain a single market for financial services.

“If we don’t get passporting, it is inevitable some jobs will go,” he said, referring to the City of London, rather than RBS.

Photo: Ross McEwan (by Terry Murden)

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