The shares were bought by the government in the teeth of the global financial crisis for £5.02 each, and were sold into the market for £2.81, a loss of about £1.1bn.
But the government’s own National Audit Office calculated the loss to be £1.9bn when the cost of financing is considered. This is because the government borrowed the money to buy the shares.
In addition, there will have been an impact on the rate of interest at which the government has been able to borrow in recent years as a result of the RBS bail out - it will have been higher due to the debt acquired during the financial crisis.
RBS shares have been terrible performers over the past five years, falling from £3.27 to £2.71 today (5 May) over that time.
The shares fell 3.3 per cent this morning (5 June) in the wake of the sale.
The government continues to own 70 per cent of the bank. The shares are likely to continue to underperform if the market feels there is a a big, persistent seller in the market.
Laith Khalaf, senior analyst at Hargreaves Lansdown, said the RBS share price has bounced back from its slump after the EU referendum, but the taxpayer’s still going to be significantly out of pocket as the government sells down its stake.
"Few argue the RBS bailout was necessary to maintain financial stability, but the cost of that intervention is now starting to emerge," he said.
"RBS has cleared several obstacles which have now unblocked the road to re-privatisation, in particular settling claims for mis-selling mortgage-backed securities in the US.
"Today’s share sale is good news for private investors in RBS because it is a step towards becoming a normal bank again, though government sales may put downward pressure on the share price in the near term.
"As a business RBS remains a work in progress, and consequently an investment for recovery investors with a long term investment horizon.”
Chancellor Philip Hammond said today's sale represents "a significant step in returning RBS to full private ownership and putting the financial crisis behind us".
"The government should not be in the business of owning banks. The proceeds of this sale will go towards reducing our national debt - this is the right thing to do for taxpayers as we build an economy that is fit for the future.”