Britain plans to sell at least three-quarters of its stake in Royal Bank of Scotland over the next five years, raising £25 billion, the body that manages the government's stake in the bank said today.
UK Financial Investments (UKFI) Chairman James Leigh-Pemberton outlined his plans in a letter to finance minister George Osborne.
He also said it would also be possible to raise at least £2 billion from the sale of RBS shares in the 2015/16 fiscal year.
Reuters reported on Monday that Osborne wanted to press ahead with the sale at a faster rate than expected.
"I believe that realising a total of at least £25 billion from the sale of RBS shares - representing over three-quarters of the government's stake in RBS at the current market price - is feasible in the period to May 2020 while delivering value for money for the taxpayer, provided market conditions are supportive," Leigh-Pemberton said.
He was asked to look into whether it was feasible to dispose of the stake at that rate by Osborne, he revealed in the letter which was published on the Treasury's website.
The bank, which owns Ulster Bank here, was rescued by the UK government during the 2007-9 financial crisis at a cost of £45.8 billion, leaving taxpayers with a 78% stake.
Osborne said in June that he wanted to start selling the shares in the coming months.
UK taxpayers are currently sitting ona loss of around £14 billion, based on current share prices, meaning initial sales are likely to come at a loss.
However, RBS's share price is expected to benefit from the bank concluding the majority of cases relating to past misconduct over the next year and its restructuring to focus on lending to British households and businesses.
The shares will also benefit from having more liquidity once the government starts to sell down its stake.
"We expect that the RBS investment case will continue to evolve, which will create further opportunities to make disposals which deliver value for money for taxpayers in the coming years," Leigh-Pemberton said.
