LONDON — Britain's government says it intends to sell a 2.6 billion pound ($3.5 billion) part of its shareholding in taxpayer-owned Royal Bank of Scotland Group to institutional investors.
The decision comes only weeks after the bank, which was bailed out during the financial crisis, announced it had agreed to pay $4.9 billion to settle U.S. claims it misled investors who bought securities backed by risky mortgages in the run up to the 2008 financial crisis.
The tentative settlement with the U.S. Department of Justice marked a watershed moment for RBS, which was bailed out by British taxpayers after a series of acquisitions briefly made it the largest bank in the world before it collapsed a decade ago. The British government insisted that the U.S. claims had to be resolved before it could sell its stake in RBS.
UK Government Investments, which manages the government's stake in the lender, said it will sell approximately 925 million shares, equivalent to a 7.7 percent stake. At Monday's share price of about 281 pence each, it puts the value of the sale at 2.6 billion pounds.
That will reduce the government holding from about 70.1 percent to 62.4 percent.
The government sold 5.4 percent of the bank in 2015 for 330 pence each — far less than the 502 pence that the government paid for them. But the government has also expressed a wish to return the bank to private ownership.