The taxpayer now owns almost 60 per cent of Royal Bank of Scotland after its shareholders shunned a £15billion cash call and the Government agreed to buy up any shares that were left in a £20billion bail-out.
The Government was left with a 57.9 per cent majority stake in the Edinburgh-based bank after just a handful of investors stepped forward to buy shares at the price of 65.5 pence each after they fell in value since the sale was announced. RBS
has become the first bank to be part-nationalised after the Government's announcement of its £37billion bail-out rescue plan for the UK's financial system. Lloyds TSB
are expected to become the next after they merge to become Lloyds Banking Group.
RBS shares are now worth about 55 pence, offering no incentive to investors, which bought just 56million of the shares, 0.24 per cent of the total, the bank announced this morning, compared to the 22.8billion shares which the taxpayer will now be lumbered with.
And this fall in share value means that not only is the taxpayer the new majority owner of the bank, but could make a paper loss of £2.6billion for paying above their value if they do not increase again. The bank's directors also agreed to take up their shares, and are similarly sitting on paper losses for paying more than they were worth.
As part of the nationalisation, the Government will buy £5billion of preference shares, on the condition that they are repaid before any ordinary shareholders are paid dividends.
The UK's second biggest bank last year, RBS was worth £60billion before the credit crunch struck and its value fell to about a tenth of that, until its shares rallied slightly after the announcement today of its part-nationalisation.
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