He told MPs in the House of Commons yesterday that “we have to live in the real world” and that could mean losing money on its shares of the bank – which is 72% backed by taxpayers.
Hammond said: “The government is not at present actively marketing its stake in RBS.
“Our policy remains to return the bank to private hands as soon as we can achieve fair value for the shares, recognising that fair value could well be below what the previous government paid for them.”
He added: “We have to live in the real world and make decisions on the future of our holding in RBS in the best interests of taxpayers.”
During the financial crisis the government bought shares at 502p per share but now shares in the bank are now trading at 225p.
This is the first time Hammond has admitted taxpayers might lose out in the sale of government shares.
Earlier this month the government announced it had reduced its shares in Lloyds Banking Group to less than 2%, recovering more than £20bn of the £20.3bn injected into the firm.