Hammond loses £2bn selling RBS shares - Magic Money Tree is alive

[SirGalahad]

With MPs like this in charge we have no hope. This is an utter disgrace.

https://www.theguardian.com/business/2018/jun/05/hammond-forced-to-defend-rbs-shares-sale

Philip Hammond has been forced to defend the government’s decision to sell part of its stake in RBS after an overnight sale of shares left taxpayers nursing a £2bn loss.

Prem Sikka, emeritus professor of accounting at the University of Essex, said: “Why sell? Taxpayers bailed out the bank and when there is a glimpse of recovery and profits, the government sells it at a loss to ensure that profits are collected by its friends in the City.”

I wonder how anyone can defend that?

 

[Ian H]

I can't. What a knob, as the guy says, why even sell them?

 

[SirGalahad]

We could have just held onto the shares. But after the final hurdle of US fines been resolved it means now the only cloud over the RBS share price has been removed so Hammond dumped the shares knowing full well the hedge funds would hoover them up knowing they are onto a one way bet.

If this happened in a third world country we would rightly say corruption but it happened in the UK.

 

[ellal]

We could have just held onto the shares. But after the final hurdle of US fines been resolved it means now the only cloud over the RBS share price has been removed so Hammond dumped the shares knowing full well the hedge funds would hoover them up knowing they are onto a one way bet.

If this happened in a third world country we would rightly say corruption but it happened in the UK.

That sums up the situation!

 

[JohnD]

If this happened in a third world country we would rightly say corruption but it happened in the UK.

not "but"

"and"

 

[Notch7]

Did I miss out on some cheap shares?

 

[motorbiking]

They've only sold 8% and I'm pretty sure there was a lot of issues with EU state aid driving the need to push the bank out of public control as soon as possible.

 

[Judy in the sky]

I think he was trained in the art of finance by Gordon Brown.

 

[ellal]

They've only sold 8% and I'm pretty sure there was a lot of issues with EU state aid driving the need to push the bank out of public control as soon as possible.

Yeah, and 'only' 62% to go.
So if sold on equally unfavourable terms (and including the previous sale), the taxpayer will have 'only' lost £17bn!

And the comment about the EU is complete b ollox btw!

 

[Lower]

They've only sold 8% and I'm pretty sure there was a lot of issues with EU state aid driving the need to push the bank out of public control as soon as possible.

Plus the fact the government has been paying interest on the money it borrowed to bail out the banks....

Demonstrating the the government intends to sell all the shares will probably also have a positive effect on the share price in the medium term, thus making the remaining shares worth more.

 

[ellal]

I think he was trained in the art of finance by Gordon Brown.

At least Brown's gold loss was less than the £3bn lost so far on RBS.

The tories also lost us £3.3bn on Black Wedesday.
And how many tens/hundreds of£billions has the taxpayer lost via tory public service cheap sell offs?

 

[EddieM]

Well.. not saying it's a good deal as it's not.. but as usual is is far from the full story. The bank levy has brought in about £20bn for the taxpayer, sale of Northern rock raised about 5bn and LloydsTSB was about a break even.

 

[IWalkLikeHimaMartian]

Demonstrating the the government intends to sell all the shares will probably also have a positive effect on the share price in the medium term, thus making the remaining shares worth more.

Increasing the supply of any product usually has the effect of making that product cheaper. It is no exception with shares, unless the removal of government control is perceived in having a beneficial effect. There is a long way to go before that situation arises.

 

[ellal]

Well.. not saying it's a good deal as it's not.. but as usual is is far from the full story. The bank levy has brought in about £20bn for the taxpayer sale of Northern rock raised about 5bn and LloydsTSB was about a break even.

The taxpayer only got a portion of their money back on those deals too.

And the bank levy has nothing to do with who owns the bank!
But the fall in corporation tax effectively left most banks better off even with the levy in place.

So as you say, as usual it "is far from the full story"

 

[motorbiking]

It should be fining non-UK banks for the credit-crunch, UK banks have paid a fortune to US regulators. I don't see them going after their own so enthusiastically.