Sliding bank shares leave the taxpayer with a £19bn loss

My Account
Logout

Create an Evening Standard Account

Use your social network

Save time by using your existing account to sign in to Evening Standard

We'll never share your information or post anything to your account without your permission

Welcome! Sign in here

Use your social network

Save time by using your existing account to sign in to Evening Standard

We'll never share your information or post anything to your account without your permission

Forgot your password ?

Registration

* indicates fields that are mandatory

Email *

Password *

Confirm Password *

First name *

Surname *

Postcode *

Country *

Mobile phone number

Username *

Gender *

Year of birth *

When you sign up...

You will have access to all our online competitions, discounted offers and can post comments on our site.

You will also receive The Weekender newsletter sent every Thursday - it’s full of fantastic offers and ideas for the weekend. You can update your email preferences in your account page when you log in.

Other newsletters and emails

Homes & Property Newsletter - Yes I want to receive the weekly email with all the latest news on property in the capital

Occasionally we would also like to send you relevant emails detailing specific offers either from ourselves or carefully selected partners. If you would prefer not to receive these then please tick the appropriate boxes below. We will never pass on your details.

I do not want to receive additional offers and information from the Evening Standard

I do not want to receive additional offers and information sent by Evening Standard on behalf of carefully selected partners

Terms and Conditions

* I have read, understood and agree to be bound by the terms and conditions of Evening Standard

Registration

Mail Sent for Registration Confirmation.

A confirmation email has been sent. Please activate your account by clicking on the activation link sent in your mail box.

In a blow to hopes that the Government could soon be able to start selling down its holdings, the value of the combined 84% RBS and 43% Lloyds stakes has fallen recently, with shares in both banks trading close to three-month lows this week.

Most of the shortfall - £17.4 billion - comes from the investment in RBS.

Its shareholders met in Edinburgh this morning to give the go-ahead to the bank's entry into the Asset Protection Scheme and the issuing of "B" shares to the Government, which will take place next week.

When the "B" shares are included, the Government will have paid an average of 50.2p for its holding.

Its total injection into RBS will soar to £45.5 billion, in the costliest banking bailout anywhere in the world. But with the shares changing hands for only 31p today, the stake is now worth just £28.1 billion.

Meanwhile, the Treasury's holding in Lloyds is £1.7 billion under water.

The Government has forked out a total of £20.3 billion on Lloyds after its ill-fated acquisition of HBOS. It has pumped £14.5 billion into the part-nationalised bank and took up its rights in the bank's £13.5 billion cash call, which closed last Friday.

However, Lloyds will pay £2.5 billion in exit fees after leaving the Asset Protection Scheme, taking a bite out of the taxpayers' losses.

The Government's 43% Lloyds stake is worth £16.1 billion, against a cost of £17.8 billion.

UK Financial Instruments, the body which was set up to manage the holdings, has been looking into exit strategies and reportedly intended to start offloading the stakes as early as next year.

With Government debt set to soar in the next four years, it was hoped the sale of the shares would give a much-needed boost to the public coffers.

But City experts warn that the shares will have to rise a long way above paper break-even point for the Government to offload them at a profit given the discount needed to sell such large stakes.