Business

RBS bailout loss stands at £22billion | City & Business | Finance


It says that figure is a £1.7billion improvement from March, when the OBR produced its last Economic and Fiscal Outlook, because of the improvement in RBS’ share price.

During that six-month period, shares in the bank have risen 13.1 per cent and closed on Friday at 217.85p.

The independent Budget watchdog said that RBS and the Financial Services Compensation Scheme (FSCS) were the reasons why the taxpayer is currently sitting on a loss on its credit crunch bailout measures.

RBS still owes taxpayers £26.2billion, while the FSCS still owes £4.2billion.

The scheme had to borrow more than £20billion from the then government to compensate customers whose savings were at risk because of bank failures.

On the other hand, the taxpayer is currently sitting on a £1.1billion profit on the Northern Rock and Bradford & Bingley loan books, which it took on as part of its bailouts.

Last week Chancellor Philip Hammond announced that the Government will resume the sell down of its stake in RBS.

The OBR expects the sale of RBS shares to be spread over five years, raising £3billion a year.

The OBR says the money raised from RBS share sales will help ensure the Government manages to cut net debt as a share of gross domestic product during the next financial year and beyond.

However, in numerical terms the national debt will continue to grow from £1.7 trillion to £1.9 trillion.

Elsewhere, this week TSB will unveil a new IT system that will save it £300million and enable it grow.

The bank was spun off by Lloyds Banking Group and floated on the London Stock Exchange in 2014 in order to comply with European state aid rules.

TSB has been paying to use Lloyds’ systems since, but will now move on to its own platform.



Source link

Add Comment

Click here to post a comment