Osborne eyes flash sale of half government’s RBS stake

Last month, Chancellor of the Exchequer George Osborne said The Treasury would begin drawing down its share in the Edinburgh-based lender later this year.

However, today’s reports suggests a pace far quicker than first expected in a move that could raise £16 billion for the exchequer.

News outlet Reuters has cited sources close to the government who have indicated the sale could be underway as soon as September.

The government bailed RBS to the tune of £45.8bn bailout in 2008 at the height of the financial crisis.

Since then, RBS shares have plummeted in value and are yet to recover to a level many believe offers value for the UK taxpayer.

Mr Osborne’s announcement last month that he intends to press ahead with a sale regardless was met with criticism from political opponents. But it is believed that the chancellor has grown impatient with the litany of scandals and fines that have hampered RBS’s recovery and show no signs of ending.

When announcing his initial plans for a sale, Mr Osborne estimated the government would make a £7.2bn loss but cited a report from advisory firm Rothschild which suggested this would be cushioned by profits made from other state-owned assets such as the other bailed-out banking giant Lloyds as well as credit guarantee scheme fees.

He said starting the RBS sell-off was “the right thing to do”.

Goldman Sachs has been hired as the privatisation adviser to UK Financial Investments, which is tasked with managing taxpayer stakes across the economy.

Meanwhile, Scotland’s First Minster, Nicola Sturgeon has been forced to concede that the three-and-a-half-year inquiry into potential criminality at RBS is nowhere near a conclusion and any consequent charges are unlikely in the near future.

Ms Sturgeon was compelled to explain the delay in the reports findings amid suggestions that bankers were “above the law” and that Frank Mulholland, the lord advocate, was “simply going through the motions” when he ordered an investigation into banking irregularities in Scotland in late 2011.

Ms Sturgeon cited the complex nature of the subject matter, saying that it inevitably would take “some time to conclude” the work.

The long delay in reaching potential charges had been questioned by Ian Fraser, the author of Shredded: Inside RBS, The Bank That Broke Britain.

In his letter to Ms Sturgeon, Mr Fraser contrasted the UK’s failure to prosecute bankers with the actions of the authorities in Iceland, where bank executives have served jail terms.

He said: “After three years of investigations there has not been one arrest, not one person has been charged or sentenced and not one person has been sent to prison.

“I would argue that a tougher stance on financial crime is possible in Scotland as, unlike banking supervision and financial services regulation, justice is a devolved matter.”

In a letter responding to Mr Fraser, Ms Sturgeon said: “The Crown Office and Procurator Fiscal Service has advised that the inquiry is complex and the volume of documentation that the investigators are considering is huge. The inquiry is being conducted by the Serious and Organised Crime Division — this involves police, prosecutors and specialist, forensic accountants.” She added: “If criminality is uncovered then the lord advocate has indicated the criminal proceedings will be instructed.”