The government yesterday kicked off the sale of its remaining stake in Royal Bank of Scotland (RBS), announcing that it would begin the process of offloading 7.7 per cent of the bailed-out bank overnight.

UK Government Investment (UKGI), the corporate finance arm of the government responsible for managing its stake in RBS, have advised chancellor Philip Hammond to resume selling down the 70.1 per cent stake the government has owned since the height of the financial crisis. The price of the 925 million shares will be determined through an accelerated bookbuilding process where shares are offered to institutional investors over a short time period, and will reduce the Treasury’s stake in RBS to 62.4 per cent.

The bookbuild began just before 5pm yesterday and took the closing price to 280.9p per share. The sale will return around £2.6bn to the government.

Furthermore, a settlement with the US Department of Justice and the sale of a chunk of its stake in Saudi Arabian bank Alawwal earlier in the year helped to make the bank more attractive to investors.

In 2008, the government paid £45bn to rescue RBS and in August 2015 the government sold 5.4 per cent of the bank at 330p per share, crystallising a loss of £1.1bn.

Labour has attacked the sale, with shadow chancellor John McDonnell recently calling for the government to take greater control of the bank.

However, many have welcomed the news, with Adam Smith Institute head of research Sam Dumitriu stating that: “It is a mistake to think that just because the shares were once twice as valuable that they will be again.

“The price has fallen by 50p since the last sell-off three years ago.”

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