Taxpayers take control of RBS with 57.9% stake

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RBS becomes the first bank to be part-nationalised under the Treasury's £37 billion bailout scheme. Lloyds and HBOS will join it when they complete their merger next January.

The Government will have a 57.9% stake in the NatWest owner, on which it has already suffered a paper loss of £3.1 billion. Trading in the new shares begins on Monday morning. Today, the old shares fell 2p to 52p. This is 13.5p below the 65.5p at which the Government stake was placed.

It was no surprise that existing shareholders rejected new shares at such a premium to the market price. Indeed, eyebrows were raised that 56 million shares have been subscribed for by existing investors - although that is dwarfed by the 22.8 billion shares left for the Government to pick up.

The Government is also buying £5 billion of preference shares with annual interest of 12%. RBS cannot pay a dividend on ordinary shares until it buys back those preference shares.

Stephen Hester, the new chief executive of RBS, said: "We welcome completion of the capital-raising process that has strengthened RBS considerably."

He said RBS must put the past behind and move forward with a clear focus.

"Our mission is to serve the interests of all our shareholders, large and small," he said. "We will succeed only by serving our customers well. This business reality is one we take seriously. There remain substantial uncertainties and challenges outside our control but for our part the job is underway," he added.

Today also saw the completion of Barclays' £7 billion fund-raising after it bowed to investor pressure and allowed existing shareholders access to a larger slice of its cash-raising. Barclays rejected the offer of Government money and instead sought to raise new capital from foreign sovereign wealth funds.

Trading in the notes, which were mainly issued to Qatar and Abu Dhabi, as well as in the reserve capital instruments which bolster its capital ratios, began this morning.