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RBS share sale was 'value for money' for taxpayers despite £1.9bn loss, says public spending watchdog
There was evidence about a leak of information about the sale before it was announced but this ‘did not affect the taxpayer negatively'’, the National Audit Office said
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Taxpayers received “value for money” from the sale of Government-owned RBS shares in 2015, despite making a loss of close to £2bn, according to an official watchdog.
The National Audit Office revealed on Friday that the losses from the sale of the 5.4 per cent stake hit £1.9bn, significantly more than the £1.1bn previously thought.
It confirmed that details of the impending sale were leaked to the market an hour before it was officially announced.
The NAO concluded that the sale price of 330p per share – roughly two-thirds what the Government paid for them in 2008 – was within the “fair value range” and that the sale was “well planned and organised and represented value for money”. The shares closed at 256.8p on Thursday.
In April, Chancellor Philip Hammond said people needed to “live in the real world” and accept that the Government could sell its stake in RBS at a loss.
Fair value could “well be below what the previous government paid for them”, the Chancellor said.
Sir Amyas Morse, head of the NAO, said: “The sale was consistent with HM Treasury’s overarching objective to not be a permanent investor in UK financial institutions, and UKFI's objective to execute a strategy for disposing of investments in an orderly and active way.
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“It was executed as skilfully as could reasonably be expected, and on the basis of the preparation, process and proceeds of the transaction, UKFI achieved value for money.”
The report comes just days after RBS agreed to pay a £4.2bn settlement to the US Federal Housing Finance Agency over its sales of sub-prime mortgage bonds in the lead-up to the financial crisis.
RBS is yet to start talks with the US Department of Justice over the same issue which could potentially result in a further multibillion-dollar settlement.
The talks must be concluded before the Government can begin selling down the remainder of its remaining 72 per cent stake in RBS.
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