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Fresh £8bn gov't loss on state-owned banks revealed
by Daniel Grote on Dec 01, 2011 at 07:56
The Office for Budget Responsibility (OBR) has revealed the government is set to incur a further £8 billion loss on its stake in Royal Bank of Scotland and Lloyds Banking Group, according to the Telegraph.
The banks are currently worth £30.6 billion than was paid by the government, but new OBR figures showing the cost to the government of raising funds to complete the bank rescues show that the taxpayer has incurred a further £7.8 billion loss.
'The additional costs of financing the funds raised to support the interventions... have amounted to £12.8 billion to date,' the OBR said. Those costs dwarf the £5 billion the government expects to gain from RBS's Asset Protection Scheme, and suggest the banks will need to be sold at a £7.8 billion profit in order to recoup the taxpayer's investment.
That loss comes on top of the £400 million loss the government incurred in selling Northern Rock to Virgin Money.
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6 comments so far. Why not have your say?
Charles Rickards
Dec 01, 2011 at 08:57
More negative reporting and poor grammar! So does this mean the government has to sell at a loss? or just that the overpaid number crunchers are playing up their parts?
report thisJR
Dec 01, 2011 at 09:04
Wasn't aware the Government was planning on selling today?
report thisBanged to Rights
Dec 01, 2011 at 09:24
Northern Rock has not been sold off for a loss of just £400 million there was the little matter of the use of NR own assets to help fund the deal and the huge "bad" bank still in the hands of us the taxpayer.
So the taxpayer (that means us) has been well and truly stuffed on that "best possible deal" makes GB sell off of the Gold reserves seem like a astute move..
As to true cost of bailing out the banks if it were only £8 billion we should all be jumping up and down for joy. As it is it is close to £400 billion and rising every day.
report thisJR
Dec 01, 2011 at 09:32
http://squaremile.com/blogs/507/Occupy-My-Ass.html
report thisMichael Brown
Dec 01, 2011 at 13:01
B2R
Northenr Rock was sold off as you say.
However, the "bad" part was kept and last year made a profit!
This is the long term could result in a profit overall when the "bad" bit turned good and is sold.
That will be many years away but we are making a current profit out of this and thus reduces the "£400M" loss.
report thisJohn Borgars
Dec 01, 2011 at 21:00
Darling had the option of letting Branson, or a better consortium, buy it four years ago, when it had net assets of nearly £2 billion. He seized it and paid nothing to the shareholders.
Now Osborne is selling it off at a loss.
Whose fault is that?
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