By Margot Patrick
LONDON--The U.K. government will start selling shares in Royal
Bank of Scotland Group PLC within months in a long-anticipated but
highly-symbolic move to show the country has moved on from the
financial crisis.
Chancellor George Osborne in his annual Mansion House speech on
Wednesday said that starting to sell RBS shares, even at a loss,
"is the right thing to do" for taxpayers and the economy and that
the Bank of England and independent adviser Rothschild have blessed
the plan.
The British government stake is worth 32.1 billion pounds ($49.2
billion).
"From bailing out the banks to bringing them back from the
brink, 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," Mr. Osborne said in prepared statements for the
speech.
The government spent GBP45.5 billion to bail out RBS in the
financial crisis, after a disastrous acquisition of Dutch banking
group ABN Amro nearly caused the bank to collapse. The emergency
funds have sat at the bank for nearly seven years, as a prolonged
recession, an onslaught of regulatory fines and political squabbles
over the bank's strategy held back its recovery.
Mr. Osborne said he had sought guidance on the RBS share sale
plan from Bank of England Governor Mark Carney, who in a letter on
Wednesday agreed the plan should go ahead now to "promote financial
stability, a more competitive banking sector and the interests of
the wider economy."
There had been anticipation in recent months that the government
was preparing to start selling the shares. In March, Mr. Osborne
said he wanted to get moving on the privatization in the summer,
following the country's general election last month that returned
the Conservative Party to power.
Selling the shares will underline the government's view that an
economic recovery has taken hold in Britain and that its banking
system has been significantly strengthened. The U.K. was hit harder
than most countries in the crisis of 2008 and 2009 because of the
bank bailouts and its reliance on financial services for economic
growth.
Jason Douglas contributed to this article.
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