LONDON (Reuters) - Britain may begin selling part of the state’s holding in Royal Bank of Scotland (RBS.L) at a loss later this year, sources familiar with the matter told Reuters.
The government wants to accelerate the disposal of its shares in RBS and Lloyds Banking Group (LLOY.L), rescued at a combined cost to taxpayers of 66 billion pounds ($102 billion)during the 2007-9 financial crisis.
It has already sold nearly half of its 41 percent stake in Lloyds but has yet to start selling its 80 percent stake in RBS, which received a 45.2 billion-pound state bailout.
The Conservative party, which won Britain’s general election last week, sees the sale of shares in bailed-out banks as a reflection of how it has turned around the country’s economic fortunes.
It has made a profit on its investment in Lloyds, but at current share prices it is sitting on a loss of 13.5 billion pounds on its investment in RBS.
Sources told Reuters that Finance Minister George Osborne is open to the idea of beginning to sell RBS shares at a loss later this year after the Conservatives won an unexpected majority in Thursday’s vote. They said he plans to launch an independent review of the matter in the coming weeks.
Osborne said in January that the party would review what to do with the government’s RBS stake early in the new parliament.
At that time, he said he would need a lot of persuading to give up on the principle that the government would at least get its money back.
The Sunday Times reported that sources at RBS said the “mood music” from the finance ministry had changed in recent months and officials were warming to the idea of allowing a partial stake to be sold at a loss.
That could result in UK Financial Investments (UKFI), which manages the government’s stake, starting to sell the shares later this year.
Osborne has already said he plans to sell nearly 9 billion pounds worth of Lloyds shares in the next 12 months, including some at a discount to private retail investors.
RBS Chief Executive Ross McEwan said in March that he believed the government could start selling RBS shares early in the next parliament.
A Treasury spokesman said he had no further information to provide on the sale. RBS declined to comment.
Additional reporting by William Schomberg; editing by John Stonestreet