To not understand why this Government are selling RBS off at a loss when the NHS are in such financial straits?

[Awholelottanosy]

Sorry if I'm stupid and naive but I really don't understand this. Since this Government are supposed to be run by the party that are financially prudent ( as opposed to Labour), why have they sold off this public asset - which was massively subsidized by the taxpayer a few years ago, at a loss, when so many NHS trusts are on the verge of bankruptcy...? Anyone got any ideas...?

[DadfromUncle]

YABVU Obviously having used all of our (borrowed) money to bail it out, they now need to sell it to their mates in the City at a knock down price.

They don't care about the NHS except for the deals they can screw out of it
www.buzzfeed.com/solomonhughes/nhs-contract-stoke#.jmYGjkd9q

[Balanced12]

This also confused me why not sell them at what they are worth. I will await an answer with you - if they is one

[CocktailQueen]

Because they don't think the shares will ever go much higher as RBS is in such a mess internally, apparently.

[BYOSnowman]

The shares are worth what people are willing to pay. They are selling 5% of their stake and as the stake reduces RBS has a better chance of increasing its value. Hopefully there will be a point where we will make a profit on the sale of the shares.

RBS is in a terrible state. I wouldn't want to buy the shares!!

[DavesButt]

It's what Tories do - here's a list of all our other public assets he wants to sell :- here

My heart actually sank when I heard the Tories had got in again - back to the 90's ..........only worse

[GiddyOnZackHunt]

Well firstly it's a good deal for Gid's mates. They wouldn't be buying them up if they didn't think the price would go up, at least enough to turn a profit.
Secondly Osborne has to make a dent in the debt or the deficit in order to continue to claim his strategy is working. Recovering some of the money tied up in bank ownership might help him do that. And if it doesn't he can conveniently blame it on Labour

[Prole]

The non-toxic part of Northern Rock was sold to Virgin at a £440m loss too. (the toxic bit still being owned by UKFI).

Perhaps banks set the deliberate low price in order to make out like fucking bandits. That worked a treat for them on the Royal Mail sell off.

One of the arguments I've heard is that it's acceptable as it's a smaller loss than if those banks hadn't been bailed. But would it have been a loss of PUBLIC money?

At least no-one can credibly talk about the 'free' market anymore. Interventionism all the way...

[UrbaneLandlord]

Because it's not the job of the government to own banks.

To reassure the OP: when the government sells its shares in RBS then this will generate cash (which could be spent on the NHS).

Regretfully, the government is not getting as much cash back as it spent buying the shares some years ago.

[Nettletheelf]

The 5% block of the government's holding of RBS shares was sold to INSTITUTIONAL shareholders. Pension funds, in other words; yours and mine.

They were not 'sold to Osborne's City mates' in some imagined dodgy deal for their personal profit.

As others have noted, RBS is still a basket case. There's a potential $10 Bn fine from the U.S. authorities in the pipeline. If the sale of these shares sparks a price increase, the government might get more for the next batch.

[Awholelottanosy]

What's that saying? Socialism for the rich and capitalism for the poor?God how I hate this morally bankrupt government, no wonder Corbyn is getting so much support right now, at least he has principles and values and isn't going to sell off state assets to his mates....

[GiddyOnZackHunt]

Urbane - this is only a partial sell off so plainly the government still thinks it should own some of the bank.

Oh Nettle bless. Who manages those pension funds and takes a hefty management fee? And the share price was 20% higher earlier this year so why not sell them then?

Do remember these are the people that flogged the Royal Mail for peanuts.

[DadfromUncle]

Socialism for the rich and capitalism for the poor - exactly - the people who whine on about others being "entitled" get upset as soon as they feel the cold wind of reality - if you're as old as me you might remember the Lloyds names - great returns if you took a risk, but when the risk actually went wrong they wanted the government to step in and save 'em.

Or, going even further back, Johnson Matthey Bankers.

[LittleBearPad]

Giddy the government owns about 70% of RBS (or did until today). Dumping 70% of a company's shares onto the stock market in one go would cause the share price to collapse and the loss you're so worried about would be massively higher. They have to sell bit by bit.

Balanced the government have sold the shares at what they are worth. They bought at 500p. RBS is now about 360p a share hence the loss.

[DadfromUncle]

not 'sold to Osborne's City mates' in some imagined dodgy deal for their personal profit.

Take a look at the fees and charges - especially for stuff like underwriting these selloffs and then say that again :)

[gatorgolf]

The £5 per share was paid years ago, if they wait for the price to go up to £5 before selling they could be waiting for ever. If they sell now at a loss its not money going out so its not taking away money that could have been used by the NHS that was done years ago when the bailout happened. The sale will be getting some but not all of the original price back, its called cutting your losses

[GiddyOnZackHunt]

Little - well yes dumping the shares in one go would obviously be daft. My response was to Urbane who said it isn't the business of governments to own banks. They've hung on for the 5 years of the last parliament without shifting any and now they've decided to sell some at a price some significant amount lower than the price they were at earlier this year.

[GiddyOnZackHunt]

The price was £4 earlier this year. They're selling the shares at £3.30.

[gatorgolf]

Well with hindsight they should have sold some at £4 but would still have made a loss so wouldn't you have been questioning why they were selling at a loss if they had sold at £4? I suppose they didn't want to do pre election

[AnathemaPratchett]

Also don't forget to factor in the interest being laid on the money that was borrowed to buy the shares. So the longer the gov hold them, the more it costs in interest. If you wait for the share price to rise they/we will have paid more on interest potentially, than a loss made by selling today.

[GiddyOnZackHunt]

Not if it was at a good price. Selling at less than market value (they sold at less than the market price)? I think it's right to question that.
They were always going to sell at a loss. Even if they'd got a fiver a share then it wouldn't have paid for the interest.

[myideaoffun]

Name changed for this

They are selling now because RBS will implode if it spends much more time under government ownership. Try and find someone who works for RBS and ask them what the last 7 years have been like.

[LittleBearPad]

The underwriting fee charged by the investment bank was £1. So not exactly profitable.

[gatorgolf]

Giddy so u think they shouldn't sell at current time? Can't go back to when they were £4 a share its in the past. So say they hang on and price drops further to say £2 for example wouldn't you then be saying but they were £3 earlier in the year

[LittleBearPad]

Selling at slightly less than market price us to get the large number if shares sold

[borisgudanov]

YABU. The Government sells business interest in order to get risk off the Exchequer. If the business becomes a dog it's better off in the private sector where the risks can be better managed and written down.