UK government to sell RBS stake 12 June 2015 4:03PM Shereel Patel The UK government is planning a phased sell-off of its 80 per cent share in the Royal Bank of Scotland, starting in the coming months.In a speech published on the government's website, Chancellor of the Exchequer George Osborne said it was "in the public interest for the government to begin now to return RBS to private ownership."The decision follows a report from investment bank Rothschild, which said RBS had made "significant progress" since the government intervention and forecast that if the the sale process began now the government would, alongside the US, be "one of the first countries that is able to demonstrate that it can comfortably expect to record a gain on its bank interventions."In the accompanying letter to Osborne, Rothschild chief executive Nigel Higgins did warn that, "given the current limited market for RBS shares, any sales in the short term would need to be carefully calibrated by reference to the depth of the market and the current size of RBS's free float and with a clear objective of maintaining an orderly aftermarket following any transaction." The governor of the Bank of England, Mark Carney, wrote to Osborne that returning RBS to private ownership would "promote financial stability, a more competitive banking sector, and the interests of the wider economy" while avoiding "considerable net costs to taxpayers of further delaying the start of a sale".Osborne said it was right to start now and increase the bank's free float, paving the way for larger sales later, as selling the entire stake could take years.The first shares sold by the government in RBS will likely to be at a loss as share prices are currently below the average price of £5.00 (A$9.99) a share paid in the bailout.The government bailed out RBS in 2008 and 2009 to the tune of £45.5 billion (A$90.9 billion) after risky investments plunged in value and loans went bad during the global financial crisis. RBS has since paid the government about £4.3 billion (A$8.6 billion) in dividends and fees.The Edinburgh based RBS reported its seventh consecutive annual loss in February and has announced plans to dismantle its investment bank and close branches in 13 countries.