Royal Bank of Scotland sinks after government sell-off

Shares in Royal Bank of Scotland (LON:RBS) dropped by 3.63% to 270.70p, as at 1130 BST, after the UK government announced it had sold a 7.7% stake in the bank for 271p a share. This price represents a loss of almost 50% from what the government injected into the bank to bail it out in 2008 as restructuring and fines for misconduct, including a £3.6 billion fee levied by US regulators last month, have hindered the company’s recovery.

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Michael Hewson, chief market analyst at CMC Markets said that any share sale was going to be controversial, but that the loss also had to be measured against the economic costs of allowing the bank to fail.