Britain looks to sell off parts of Royal Bank of Scotland
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Britain looks to sell off parts of Royal Bank of Scotland
Stacey Vanek Smith: Britain faces the same dilemma as the U.S. when it comes to bailed-out companies: When to sell off the billions of dollars worth of assets it bought from those companies at the height of the crisis. For us it’s General Motors and AIG; for Britain, it’s the Royal Bank of Scotland.
The U.K. is talking about selling off a chunk of the bank, but it would have to take a pretty big loss. Marketplace’s Stephen Beard reports from London.
Stephen Beard: The British government bought the bulk of the Royal Bank of Scotland to stave off its collapse. It cost more than $70 billion of taxpayers cash. Now, desperate to cut its deficit, the government would like some of that money back. It wants to offload a some the shares. The oil-rich Gulf state of Abu Dhabi is a likely purchaser, but the sale is proving controversial — because the bank’s now worth only about half what the government paid for it.
Chris Leslie is a spokesman for the opposition Labour Party.
Chris Leslie: We might lose billions of pounds of taxpayers’ money. That would be very, very wrong and it would be better if we waited for the economy to recover, for the share price to recover, so that we got better value for money.
The British government could lose more than $10 billion by doing the deal now. But those in favor of the sale say it could stimulate more investor interest in the bank, and help the government get a better price for its remaining stake.
In London, I’m Stephen Beard for Marketplace.
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