Taxpayer loses £1bn on RBS share sale

The chief executive of RBS has said the Government's sale of shares in the bank reflects the progress it is making.

Ross McEwan said: "I'm pleased the Government has started to sell down its stake.

"It's an important moment and reflects the progress we are making to become a stronger, simpler and fairer bank.

"There is more work to be done but we're determined to build a bank the country can be proud of."

Chancellor George Osborne has hailed the sale of a 5.4% stake in RBS as "an important first step in returning the bank to private ownership."

He said it was right to start selling the stake at a loss to the price paid for the shares in 2008.

"While the easiest thing to do would be to duck the difficult decisions and leave RBS in state hands, the right thing to do for the economy and for taxpayers is to start selling off our stake, he said.

"Now is the time for RBS to rebuild itself as a commercial bank, no longer reliant on the state, but serving the working people of Britain," he added.

The Government has sold a 5.4% stake in Royal Bank of Scotland for £2.1bn, but the taxpayer has made a loss of around £1bn on the sale.

UK Financial Investments, the body that holds the government's RBS stake, said it had sold 630 million shares, representing 5.4% of the bank at 330p a share in a quick-fire sale to institutional investors after the market closed on Monday.

The price was far short of the 502p paid by the Government when it bailed out the bank at the height of the financial crisis.

RBS shares closed at 337.6p on Monday, so the shares were sold at a 2.3% discount.

The move has reduced the Government's stake in the group from 78.3% to around 72.9%.