Here’s a maths puzzle to test the most numerate of readers.
Taxpayers put £5bn into RBS in the form of preference shares in October. The bank now has a market capitalisation of £13.7bn (as of Friday night).
The government is tomorrow expected to swap the preference shares for equity. We – the public – will end up with another 10 per cent of the bank, ie up from 58 per cent to 68 per cent.
So we seem to be exchanging £5bn of pref shares for £1.4bn of equity. How come?
Given that the RBS share price has fallen 23 per cent so far this morning (to 27p as of 10.25am) the swap seems even more curious.