RBS share price crash leaves taxpayers sitting on £29bn loss

The hefty plunge in Royal Bank of Scotland Group’s (LON:RBS) shares following the Brexit referendum has left UK taxpayers sitting on a £29-billion loss, The Sunday Times has calculated. RBS The lender’s shares have lost about 40 percent of their value since the UK voted to leave the European Union in last month’s referendum.

RBS’ share price meanwhile has perked up in today’s trading, having gained 3.66 percent to 174.99p as of 13:33 BST. The shares are outperforming the benchmark FTSE 100 index which has spiked 0.94 percent to 6,652.87 points amid monetary easing hopes ahead of the Bank of England’s (BOE) policy meeting later this week.
The Sunday Times reported yesterday that the taxpayer was sitting on a loss of £29 billion – equivalent to nearly £1,100 for every household across the UK – with shares in RBS having fallen nearly 40 percent since June 23. The stock closed at 168.8p on Friday, a third of the 502p that the government paid to rescue the bank during the financial crisis.

The FTSE 100 lender still remains 73-percent owned by the government, after the Treasury sold part of its stake in the bailed-out bank nearly a year ago, triggering a £1.1-billion loss for the taxpayer. Last week, RBS’ chief executive Ross McEwan warned that Britain’s decision to leave the EU would delay the sale of the government’s remaining holding in the group by a further two years.
The Sunday Times noted that with the BOE tipped to cut interest rates to a new low this week, investors are increasingly concerned about the profitability of banks. The scale of the potential slide in profit margins was reportedly brought home to Chancellor of the Exchequer George Osborne during a private meeting with City bosses last week. The newspaper reported that they had warned the chancellor that earnings were likely to come under severe pressure in coming months.
RBS is scheduled to update investors on its half-year performance on August 5.
As of 14:16 BST, Monday, 11 July, Royal Bank of Scotland Group share price is 175.60p.