The Government is to sell off a further 7.7% chunk of Royal Bank of Scotland as it further cuts its stake in the bailed-out bank.
The sale of 925m shares to institutional investors will see the government reduce its stake in RBS from 70.1% to 62.4%.
The sell-off resumes a huge privatisation programme that stalled in 2015, after the government bailed out the bank 7 years earlier during the financial crisis.
Sky News has learned that the sell-off will be priced at about 271p per share, raising proceeds for the government of just over £2.5bn.
But the sale will also incur a loss as each share goes to investors at a price much lower than the 502p the tax payer paid for them 10 years ago.
The government also incurred a loss when it sold 5.4% of the bank in 2015 for 330p each.
Labour’s Shadow Chancellor John McDonnell, criticised the imminent sale, saying there was “no economic justification” for it.
He said: “There should be no sales of RBS shares, full-stop. But because of this government’s obsession with privatisation, the taxpayers who bailed out the bank will now incur an enormous loss.
“Taxpayers are paying the price for the Tories’ mismanagement of RBS over the past eight years.”
UK Government Investments (UKGI) recently described it as “an entirely fair assumption” that it would be able to sell a £3bn stake in RBS during this financial year.
It also projected for a further £12bn of disposals during the next four fiscal years.
The Treasury said: “UK Government Investments (UKGI) today advised the Chancellor it would be appropriate to conduct the second sale of the Government’s shareholding in the Royal Bank of Scotland.
“The Chancellor agreed with that advice and has authorised the process to begin.”
The announced sell-off follows Sky News’s exclusive story flagging the sale.
It also comes barely a month after the bank reached a long-awaited $4.9bn (£3.6bn) settlement with the US Department of Justice (DoJ), relating to the mis-selling of mortgage bonds before the financial crisis.
RBS also recorded its first profit in a decade this year.
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In February the bank reported a profit of £752m for 2017, the first time in a decade it has been in the black.
That compared to a £7bn loss for the year before – the latest in a string of losses going back to the financial crisis, that added up to £58bn.
Laith Khalaf, senior analyst at Hargreaves Lansdown said: “RBS has cleared several obstacles which have now unblocked the road to re-privatisation, in particular settling claims for mis-selling mortgage-backed securities in the US.
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“Today’s share sale is good news for private investors in RBS because it is a step towards becoming a normal bank again, though government sales may put downward pressure on the share price in the near term.
“As a business RBS remains a work in progress, and consequently an investment for recovery investors with a long term investment horizon.”