LONDON • Britain could sell a 10 per cent stake in Royal Bank of Scotland (RBS) as soon as this week, Sky News said, citing banking sources.

The British government still holds a 71 per cent stake in the bank after stepping in with a taxpayer bailout during the financial crisis.

Sky reported on Monday that bankers expected Britain to announce the disposal of a stake worth at least £3 billion (S$5.4 billion), but added that any share sale could be delayed by market conditions or ministers' concerns about value for money for taxpayers.

At last Friday's closing share price of just under 290 pence, little more than half the 502 pence the government paid for them, the Treasury stands to lose billions of pounds on the sale.

The British government pumped £45.5 billion into RBS in the depths of the 2007-2009 financial crisis, and efforts since then to recoup the money have been stymied by the plunge in the bank's share price, regulatory probes in the US and Brexit.

In particular, a long-running investigation by the US Department of Justice into the bank's mis-selling of toxic mortgage-backed securities delayed the share sale.

But RBS agreed a smaller than expected US$4.9 billion (S$6.6 billion) settlement earlier this month, paving the way for a long-awaited return of cash to British taxpayers.

Britain had said last November it would sell £15 billion of RBS shares over five years, with £3 billion to be sold by the end of the 2018-2019 fiscal year.

"We don't comment on market speculation," a spokesman for the finance ministry said.

RBS and Lloyds were rescued during the financial crisis. Britain sold its remaining stake in Lloyds last year.

REUTERS