UK Government Investments Limited (UKGI) announced the “successful disposal” of 7.7% of The Royal Bank of Scotland Group plc at 271p per share for proceeds of about £2.5 billion.
The UK taxpayers’ shareholding in RBS will fall to 62.4% from 70.1% after the sale.
RBS was bailed out by the taxpayer during the financial crisis for about £45 billion at an average price of about 502p per share.
That means the latest share sale alone represents a loss for the taxpayer of roughly £2.1 billion.
The return was based “on the reality of the situation that RBS is now in,” Treasury Economic Secretary John Glen said.
Glen told the BBC’s Today programme that RBS was in a “much healthier position … and the taxpayer needs to receive some of that money back”.
Glen said: “I would love it if we could sell the shares at a much higher price.
“Obviously that is what everyone would like to do, but we need to be realistic and look at the market conditions.”
Glenn said RBS was “a completely different institution to where it was 10 years ago”.
“They’ve gone from operating in 38 countries to nine, their total assets have fallen significantly.”
UK chancellor Philip Hammond said: “This sale represents a significant step in returning RBS to full private ownership and putting the financial crisis behind us.
“The government should not be in the business of owning banks.
“The proceeds of this sale will go towards reducing our national debt — this is the right thing to do for taxpayers as we build an economy that is fit for the future.”
RBS CEO Ross McEwan in a statement: “I am pleased that the government has decided the time is now right to re-start the share sale process.
“This is an important moment for RBS and an important step in returning the bank to private ownership.”
Citigroup Global Markets Limited, Goldman Sachs International, J.P. Morgan Securities plc and Morgan Stanley & Co. International plc acted as joint bookrunners for the placing.
UKGI and HM Treasury have undertaken to the bookrunners not to sell further shares in RBS for a period of 90 calendar days following the completion of the placing without the prior written consent of a majority of the bookrunners.