RBS sale delay to leave $22bn hole in UK budget

RBS building

U.K. Chancellor of the Exchequer Philip Hammond faces a $22bn hole in his budget update as the government expects further delays in disposing its stake in Royal Bank of Scotland.

Bloomberg News reports that Britain’s Office for Budget Responsibility scrapped an estimate made in March for the nation to recover $26.74bn from selling its 73% stake in RBS over the next four years, documents released on its website on Wednesday show. Sales of other nationalized banking assets, including the loan book of failed lender Bradford & Bingley, will make up some of the gap, the statement showed.

RBS Chief Executive Officer Ross McEwan’s failure to sell the bank’s Williams & Glyn unit and a looming settlement with U.S. authorities over the sale of mortgage securities has left Hammond stuck with the bank eight years after it required a $56.6bn bailout. Hammond has gone ahead with selling the nation’s remaining 8% stake in Lloyds Banking Group at a loss.

The value of financial asset sales for the U.K. has been “reduced significantly relative to our March forecast due to RBS share sales being put on hold,” the OBR said in the documents released alongside Hammond’s Autumn Statement. The chancellor has said it’s not practical to sell RBS until some of its issues are resolved.

To access the complete Bloomberg News article hit the link below:

RBS Sale Delay Leaves U.K. Facing $22.3 Billion Hole in Budget

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