Government determined to lose money on RBS share sale

The total (expected) loss to the UK taxpayer from the sale of RBS will be £13 billion. Lucky for some, eh?

Yes – lucky for those who are rich enough to be able to afford shares in this bank; shares valued at much less than they were when the taxpayer bought this bank as a loss-making firm, and shares that will be worth huge dividends each year, now that this bank is starting to make profits again.

It isn’t the government that will make a loss on the sale, though – it’s the population of the UK. Note that the sale is happening now that RBS is starting to turn a profit again – that’s not for the likes of you and I, though! No, we must suffer the loss, at a time when the United Kingdom needs the money.

Isn’t it strange, how the Conservative Government that demands that we must shoulder any burden, including the premature deaths of our loved ones due to the removal of £12 billion of social security funding…

Isn’t it strange how these Tories are happy to accept a loss greater than that, in order to give the undeserving rich an undeserved reward?

The government has started to sell off its 78% stake in the Royal Bank of Scotland.

UK Financial Investments, the body that holds the government’s RBS stake, said it would offer about 600 million shares, representing 5.2% of the bank, to institutional investors.

It is expected that the government will make a loss of about £1bn on the sale.

Source: Government starts RBS share sell-off – BBC News

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  1. ian725 August 4, 2015 at 12:16 am - Reply

    Its a disgrace I should wish to name it as ‘LEGALISED FRAUD’ The Labour party should be raising hell over the sale at that loss, if, indeed loss does happen. Well done Mike for keeping it alive.

  2. Mr.Angry August 4, 2015 at 6:26 am - Reply

    Yes the Tories grubby little fingers all over state assets no doubt their measly little friends will be rubbing their hands and Gideon has the audacity to impose £12 billion cuts to the poorest in society. What have we become ?

  3. hayfords August 4, 2015 at 10:24 am - Reply

    The sale is scheduled to take around 5 years. The expectation is that the bank will be in increasingly profitable and the share price will rise over the period. It could well end up making monetpy for the government. The only practical way of selling sizeable tranches of the stock into the market is to sell it to institutions. Those are the institutions where all our pensions are invested.

    • Mike Sivier August 4, 2015 at 11:03 am - Reply

      The expectation is as I’ve stated – that the UK will lose £13 billion.
      Where you mention “institutions” – would any of these be hedge funds? Only, some of us remember how poorly that worked out in the case of Royal Mail.

      • hayfords August 4, 2015 at 11:26 am - Reply

        The estimate of £13b or £15b by some is based on false premises. That is the projected loss if all the shares were to be sold at the current price. As the bank returns to private ownership the price should rise. The current sell price seems to be 330p and the breakeven price is about 441p.

        • Mike Sivier August 4, 2015 at 11:39 am - Reply

          Break-even price should be 500p, as I understand it – except it won’t be, will it? If the Conservative Government sells one tranche of shares at 330p, that will push the break-even price upwards in the case of the remaining shares. It seems that, if anyone is working on a false premise, it is you.

  4. RogerConvery August 4, 2015 at 12:32 pm - Reply

    This is part of the money that the Labour Government was supposed to have frittered away. Now the shares are being sold back to the group off people who were really responsible, at a colossal discount.

    • Mike Sivier August 4, 2015 at 12:33 pm - Reply

      Exactly – it is the Conservative Government that is frittering the money away.

      • Florence August 4, 2015 at 2:32 pm - Reply

        I rather thought that price sold isn’t Osborne’s focus – it’s about raising enough for his various give-aways to the rich. While, as you say, he forces the poor to pay for the original purchase AND NOW the shortfall in the sale, which of course in accounting terms should be added to the original purchase price per share…….because that’s what we’re paying off with our lost ESA and DLA / PIP and tax credits.

        The budget (pre-election) was clear about the timetable to raise the amount needed to fund his hand-outs to the rich, so that determines how many shares he sells, rather than the price of each share. The RBS state shareholding is an almost bottomless wallet when looked to in that way. This is typical thinking of a trust-funder, who has no real concept of value, worth, and labour, just a big bag of resources to squander, hiding behind the fig-leaf of austerity to make the rest of us pay and pay again.

        Today’s sale seems to me to be another variant on the Bullingdon specialty of burning £50 notes in front of the homeless, given the context of the “emergency budget”.

  5. hayfords August 4, 2015 at 5:13 pm - Reply

    If the government sold its stake in Lloyds at today’s prices, it would make £1.5b profit. That is because the government has a smaller stake than RBS. Over time the RBS share price will rise and may well yield a profit as well.

    • Mike Sivier August 4, 2015 at 6:16 pm - Reply

      If there are currently fewer shares of RBS available, that should push the share price up. Simple supply and demand, that is.

  6. casalealex August 4, 2015 at 5:18 pm - Reply

    Well, that’s it then! Public money was used to get the bank out of their catastrophic greedy machinations; and they were hoist with their own petard!
    Now this totalitarian ‘government’ is selling the bank off, to their rich pals, at a loss of £13bn to the proletariat. All throughout the last five years these greedy robbers have been selling off the country’s assets, (and lining their own pockets), which have all been paid for with the public’s hard earned money. Most of this has been done as a fait accompli – without a mandate from the people. They have sold off our NHS, railways, utitilies, Royal Mail, prime land in London, all to corporations which are mostly based in other countries; so nothing to be proud of – as nothing is British any more.

  7. NMac August 5, 2015 at 6:31 am - Reply

    This is all about looking after the Tory Party’s wealthy donor friends, and of course themselves.

  8. mrmarcpc August 6, 2015 at 1:52 pm - Reply

    So casual of them to just write off 13 billion of our money, if anyone else did this, they’d be hammered by the state, the state does it and we’re supposed to just let it go and accept it, once more this government is wasting our money and once again looking after their rich, tax dodging/evading friends, and they wonder why the people are p*ssed off!

    • Mrs Margaret Charlton August 7, 2015 at 8:58 am - Reply

      This about making the wealthy in our society even richer and punishing the majority of people who are hardworking and living on a minimum wage.
      I am totally disgusted, but not surprised at the actions of this govenment who are hell bent on punishing the poor who in some cases only exist to
      Enrich the most privileged.

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