RBS record losses raise prospect of 95% state ownership
Royal Bank of Scotland has suffered the biggest loss in British corporate history – more than £24bn – and admitted today the taxpayer could end up owning 95% of the bank if its losses continue to mount.
The troubled bank needs to sell up to £19.5bn new B shares to the taxpayer in order to insure £300bn of its most troublesome assets. As a result, the taxpayer’s voting rights over the bank would increase to 75% from almost 70% now. But Stephen Hester, the new chief executive, said the government’s “economic interest” could rise to 95% “depending on how things work out”.
On a conference call with reporters this morning, Hester said he “wanted to be honest and clear” on the government’s stake because “we live in an uncertain world”. But the voting influence of the taxpayer would be restricted to 75%, he said.