UK taxpayers forecast to make £32.1 billion loss on RBS privatisation

FILE PHOTO: A worker cleans the glass exterior next to the logo of RBS (Royal Bank of Scotland) bank at a building in Gurugram on the outskirts of New Delhi, India, September 8, 2017. REUTERS/Adnan Abidi

LONDON (Reuters) - British taxpayers are forecast to make a 32.1 billion pound loss on the long-delayed privatisation of state-backed lender Royal Bank of Scotland RBS.L, according to an updated official forecast on Wednesday.

The loss estimate – published by the Office for Budget Responsibility alongside the first budget from Boris Johnson’s government – has increased from a previous forecast of 31 billion pounds made in March last year.

The OBR also estimates that it will take a year longer to fully return the bank to private hands, pencilling in the final stock sales by 2025.

RBS remains 62% owned by taxpayers after a 45 billion pound bailout in the 2008 financial crisis.

The government has offloaded RBS stock twice before, but has not sold any shares since June 2018 amid market turmoil exacerbated by Brexit uncertainty and more recently fears over the economic impact of the coronavirus outbreak.

Reporting by Iain Withers and Lawrence White, editing by Sinead Cruise