The government been forced to take ownership of 57% of Royal Bank of Scotland after it’s own shareholders took up on just 0.24% of its capital raising.
The government will pay £15bn for the majority stake in the troubled bank and £5bn in preference shares following its bid of the UK’s biggest bank bail-out.
This bail-out will leave the long suffering taxpayers with an instant paper loss of £2.3bn, as RBS shares have recently been trading at a much lower share price than the 65.5p offer revealed last month.
In a bid to increase value for taxpayers and stop future politicians making business decisions about the running of banks, the government’s shares will be held by an independent UK Financial Investments Ltd. (Who are they?)
According to the newswires RBS has been trying to flog RBS Insurance all year to raise £7billion, prior to the banks recent troubles!
As part of The Royal Bank of Scotland Group, RBS Insurance is one of the largest general insurers in the UK, employing over 18,000 staff and incorporating many of the highest profile household names in the business, including Direct Line, Churchill, Green Flag and Privilege, amongst others.