Taxpayer owns almost 60% of RBS
Due to the small take-up of its £15 billion share offer by investors, the Government is to own 57.9% of Royal Bank of Scotland (RBS).
This was widely expected as shares in the bank were trading below the 65.5p offer price announced last month.
Last week, shareholders voted by 99% in favour to take the Government money, however, under the terms, the bank will see a restriction on executive pay and dividend payments.
Jut 0.24% of the new shares have been taken up by investors, leaving the taxpayer with the remainder.
The government will pay about £15 billion for the majority stake in the bank and will also purchase £5 billion of preference shares.
The fundraising is the second by RBS this year alone, back in April, it announced a £12 billion rights issue, the largest Britain had seen.
RBS, which is Britain’s second largest bank, has suffered lately after it recently announced further write-downs on credit assets totalling £206 million, on top of the £5.9 billion it reported in the first six months of the year.
In related news, RBS has pledged to small and medium sized enterprises (SMEs) who are suffering as a result of the economic slump.
Rising borrowing costs has had an affect on many firms and the new measures will see RBS freeze overdraft charges for its business customers for at least a year, commencing next Monday, December 1.
Furthermore, it has pledged not to withdraw its lending facilities for its 1.1 million business customers.
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