The government has made a £2.1 billion loss on its sale of Royal Bank of Scotland (LON: RBS) shares.
The shares were sold at almost half of the price paid in the government’s bailout of the bank ten years ago during the financial crisis.
“There is no economic justification for this sell-off of RBS shares,” said the shadow chancellor John McDonnell.
“There should be no sales of 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,” he added.
After the sale, taxpayers will have a 62.4 percent stake in the bank, which was 70.1 percent before the sale.
Shares were initially bought for 502p each and sold at 271p each.
“The RBS share price has bounced back from its slump after the EU referendum, but the taxpayer’s still going to be significantly out of pocket as the government sells down its stake,” said Laith Khalaf, senior analyst at Hargreaves Lansdown.
“Few argue the RBS bailout was necessary to maintain financial stability, but the cost of that intervention is now starting to emerge.”
According to Khalaf, the 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”.
Shares in the lender fell four percent in early trading.
The group saw a positive start to 2018, reporting their first profit in ten years.