British government owns 70.3% of RBS group


July 15, 2010 Updated Apr 7, 2009 at 8:02 AM CDT

Royal Bank of Scotland confirmed Tuesday that the state now owns 70.3 percent of the struggling group after investors snubbed a sale of new shares that was backed by the government.

RBS, ravaged by the credit crunch and the 2007 takeover of Dutch group ABN Amro at the top of the market, said in a statement that investors bought just 0.7 percent of new shares -- which left the government to pick up the tab.

"HM Treasury will own approximately 70.3 percent of the enlarged issued ordinary share capital of RBS," the bank said in a brief statement.

The state acquired a 57.9 percent stake earlier this year after RBS took 20 billion pounds (21.6 billion euros, 28.7 billion dollars) of government funds.

In January, the government agreed to convert its preference shares in RBS -- obtained during last year's bailout -- which were worth five billion pounds of normal shares.

But existing shareholders were also given the right to buy the shares which were priced at 31.75 pence per share. The placing was launched on March 16 and closed on Monday.

In addition, the government's stake could climb even higher after RBS agreed earlier this year to ring-fence 325 billion pounds of assets into the British government's insurance scheme for toxic assets.

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