Monday 28 May 2018 3:15 pm

Government poised to start Royal Bank of Scotland share sale

The government is to offload a multi-billion pound stake in Royal Bank of Scotland as early as this week, according to reports.

Banks have been placed on high alert as ministers kick off a process to reduce the taxpayer's 70.5 per cent stake in RBS.

Precise details on the sell-off remain unclear but bankers warned it was paramount the government is able to demonstrate it is getting value for money for the sale, Sky News reported. This, alongside stock market considerations, could delay the share sale.

One un-named City analyst told Sky News a disposal could target proceeds of more than £3bn by selling around 10 per cent of RBS.

RBS has been in the hands of the government since 2008 when ministers bailed out the ailing lender with a £45bn rescue package. The average price paid for the state stake was 502p. Shares closed last week at 289.7p each.

Earlier this month RBS agreed to pay $4.9bn (£3.7bn) to the US Department of Justice. This followed the lender posting its first annual profit in almost a decade in 2017 – both key events which have stood in the way of the Treasury reducing its stake.

Chancellor Philip Hammond has indicated he is waiting for the bank to resume dividends and for its share price to lift to minimise the hit taken by the taxpayer, however.

RBS declined to comment. The Treasury has been approached for comment.