Osborne ponders RBS share sale hair cut

Chancellor George Osborne may be set to sell-off 81 per cent state-owned Royal Bank of Scotland this year, even if it means the UK taxpayer taxing a hit on the deal.

On Friday, RBS stock closed at 352.4p.

To make a profit, the government would need to sell at a price of above 502p.

However, reports have claimed that Mr Osborne is running out of patience with the bank, which has been beset with a string of huge misconduct fines.

The chancellor is understood to be weighing up the options for the Edinburgh-based lender over the next two weeks.

The Treasury has already sold nearly half of its 41 per cent stake in Lloyds Banking Group, which it rescued along with RBS at a combined cost to taxpayers of £66 billion during the 2007-09 financial crisis.

The government has made a profit on the Lloyds sales and hopes to sell its remaining stake over the coming months, but at current prices, it is looking at a loss of £13.5billion on RBS.

However, RBS shares did rise 6.1 per cent on the news that the Conservatives won the election, potentially giving the chancellor a small excuse to argue he is getting a relatively good price for the stock.

The Treasury and RBS have not commented officially on the reports.