Last night’s speech by the Chancellor of Exchequer had been widely trailed to announce plans to make further asset disposals and on that score it didn’t disappoint. While the announcement that the government would be continuing to sell down its stakes in Lloyds Banking Group and Royal Mail, was no surprise and was widely expected, it was the decision to announce that they would be doing the same with respect to the government’s stake in Royal Bank of Scotland that was always going to be the most political and controversial. Judging by some of today’s reaction that has certainly been the case, with predictable criticism the stake is being sold off at a loss, as well as far too cheaply. That being said the shares up slightly higher on the day as investors react to the news. In 2008 the government sunk £45bn of taxpayers money into what was then one of the world’s largest banks in an attempt to stave off a catastrophic financial crisis, and since then the bank has been dogged by scandal after scandal as multiple instances of financial malpractice have come to light in the intervening years. At current share price values the stake is now worth around £32bn, which is significantly below what was put in all those years ago, raising questions as to the wisdom of selling the stake now. This does rather miss the point with respect to those who argue that we should wait to get a better price For a start we don’t really know what the counterfactual would be with respect to waiting. We could move higher, but we could also equally move lower. The bank is a much smaller entity now than it was 7 years ago, and is still facing a shareholder lawsuit in the US with respect to its 2008 rights issue, which might add some uncertainty. The fact remains it is unlikely that the UK taxpayer will ever get all of its money back, and if anyone thinks otherwise they are inhabiting a different universe to the rest of us, in which case it makes more sense to get the bank back on its feet, off the governments books and to go back to trading as a going concern free of state support contributing to the exchequer that way over the next twenty to thirty years. Ultimately there is unlikely to be an optimal time to sell down the taxpayers stake in RBS, but by signalling his intention to do it now allows the Chancellor some wriggle room to slow it down or speed it up as circumstances dictate. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment security, transaction or investment strategy is suitable for any specific person