RBS set for shareholder snub

British taxpayers were sitting on paper losses of around £2.5bn (€2.9bn) today as the deadline for Royal Bank of Scotland’s £15bn (€17.5bn) share offer expired.

British taxpayers were sitting on paper losses of around £2.5bn (€2.9bn) today as the deadline for Royal Bank of Scotland’s £15bn (€17.5bn) share offer expired.

The British government has agreed to buy any of the 22.9 billion new shares not taken up by existing shareholders to shore up RBS’s finances.

With the bank’s shares trading at 55p – more than 10p below the 65.5p price of the new shares – investors are likely to snub the stock, leaving the public sector controlling up to 58% of the Edinburgh-based bank.

RBS will announce the results of the share offer by Friday. It comes just months after an original £12bn (€14bn) rights issue by the bank before the financial crisis deepened in September.

Chairman Tom McKillop apologised to shareholders last week at the meeting to approve the bail-out, saying he was “profoundly sorry” for the human and financial cost borne by investors.

The British government has also committed to buying £5bn (€5.8bn) in preference shares - which impose restrictions such as a ban on dividend payouts – which RBS will buy back in time.

Two other UK banks, Lloyds TSB and Halifax Bank of Scotland, will also ask shareholders to buy £13bn (€15bn) of new shares in offers underwritten by the taxpayer.

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