Royal Bank of Scotland Group’s (LON:RBS) shareholders have okayed a plan allowing the bank to start buying back shares from the UK government which still holds 62 percent in the lender following its taxpayer-funded bailout during the financial crisis. Reuters meanwhile reported that the Labour Party had said that it would halt the FTSE 100 group’s privatisation if it came to power.
RBS’ share price has slipped marginally into the red this morning, having given up 0.24 percent to 249.20p as of 08:17 GMT. The shares are marginally underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.05 percent lower at 7,169.32p.
RBS looks to speed up privatisation
RBS announced in a statement yesterday that its shareholders had approved a special resolution to authorise the company to make off-market purchases of ordinary shares from the Treasury. At a general meeting 98.7 percent of those who voted backed the proposal.
City A.M. said in its coverage of the news that the buyback could take place via three methods – buying back shares as part of a wider placement by the Treasury, a bilateral deal where the bank buys a certain number of shares, and a ‘trading programme where the bank and Treasury each nominate a broker to oversee the daily purchase of shares.
Labour Party updates on plans for group
In a separate development, the Labour Party’s shadow minister told Reuters that the party would halt RBS’ privatisation if it came to power, but would not seek to exert day-to-day control.
“If RBS is now paying dividends, and the price of the shares is under what was paid, we cannot see the rationale for selling more shares,” said Labour’s Jonathan Reynolds, as quoted by the newswire.