Osborne to begin push for privatised RBS

Chancellor George Osborne is expected to outline privatisation plans for Royal Bank of Scotland (RBS) in next week's Mansion House speech, the Financial Times reported.

The treasury announced on Monday plans to sell a substantial portion of RBS shares to retail investors in the next year, alongside a further reduction in its stake to below 19%.

The Chancellor will capitalise on his party's unexpected outright majority to make preparations to begin selling RBS shares significantly below the price of the £45bn bailout during the financial crisis.

Senior RBS figures anticipate a share sale in the fourth quarter of 2015, upon completing a settlement with US regulators for the mis-selling of subprime mortgage securities.

Analysts expect the settlement to cost billions, but with estimates varying wildly, properly valuing shares has been almost impossible for the government.

RBS has already invited investment banks to pitch for an enlarged corporate broking role, including responsibilities acting as privatisation advisers.

Osborne recently told the CBI that he was keen to “get the government out of the business of owning great chunks of our banking system”.

Last month, he said that £4bn of shares in Lloyds would be handled with Thatcher-era privatisations, having already sold another 1% stake via drip-feeding shares into the market.