Britain sells RBS shares for 2.1 billion pounds

The move has reduced the Government’s stake in the group from 78.3% to around 72.9% and the £2.1 billion raised will be used to pay down Britain’s national debt. It was reported that the Treasury sold the shares for 330 pence each which was 2.3 percent lower than Monday’s closing price.

RBS was briefly the world’s biggest bank by assets, but it has more than halved its assets and the size of its investment bank and sold businesses around the world.

The bottom line is that the government will indeed nearly inevitably make a hefty “loss” of the RBS bailout – there is very little chance the price will reach the heights necessary to break even in real terms.

Ian Gordon, a banking analyst at stockbroker Investec also joined in the criticism, saying he was “perplexed” by the timing, which he believes “arguably sold the taxpayer short”.

The placing will comprise of approximately 600m shares in the bank. Overall, the government is sitting on a 15 billion pound loss on its holding, based on the current stock price and its average purchase price of 502 pence. The CEO added that there is more work to be done but the management team continues to build a bank that the country could be proud of. As governor, Mr Carney is also chairman of the board of the Financial Policy Committee, which is tasked with protecting the stability of the financial system.

Chancellor George Osborne has argued that the bank was never bailed out with the idea of making a profit but was instead bailed out to safeguard the UK’s financial security, he is therefore no longer prepared to wait for the shares to recover to what was paid for them.

Following the 2008 bailout government officials hoped RBS’s vast worldwide and investment banking operations would help generate enough profit to put the bank on its feet. It is run by a board who manage the investments “commercially” and report to Mr Osborne as chancellor.

Shadow Treasury minister Barbara Keeley laid into the Chancellor after speculation the shares were being traded at 330p each – a 34 per cent reduction in the 500p paid per share by Labour in 2008.

“The most important question for the tax-payer – are we getting good value for our money?”

Oil prices tumbled 5% on Monday amid fears over Chinese growth after weak manufacturing figures, and remained below 50 US dollars a barrel today.

Jonathan Isaby, chief executive at the Taxpayers Alliance, said: “Taxpayers are still feeling the after-effects of the decision to rescue RBS with huge sums of taxpayers’ money, and it’s beholden on the Chancellor to get the best deal possible”.