LONDON (Reuters) - Britain has sold some of its holding in Royal Bank of Scotland RBS.L, the bank which it rescued in the 2008 financial crisis, but has taken a loss of more than 2 billion pounds ($2.68 billion) on the deal.

UK Government Investments sold a 7.7 percent stake in a placement overnight to institutional investors at 271 pence a share, almost half of what the government paid during its initial and largest capital injection into RBS, which it bailed out for a total of 45.5 billion pounds.

“This sale represents a significant step in returning RBS to full private ownership and putting the financial crisis behind us,” Britain’s Finance Minister Philip Hammond said.

Once one of the largest banks in the world by assets, RBS’s near collapse required Britain’s biggest bailout, leaving the government still holding a large stake nearly a decade later. After the latest sale its holding is 62.4 percent.

Britain’s opposition Labour party criticized the share sale when it was announced late on Monday, saying that taxpayers would lose out and the government should have held out for more.

The bank’s shares were down 3.4 percent at 0719 GMT.

Jefferies analyst Joseph Dickerson said the sale marked a step towards longer-term investment value in RBS, which has not paid a dividend for a decade.

‘AN IMPORTANT MOMENT’

RBS Chief Executive Ross McEwan said the government’s decision reflected the progress RBS had made in becoming simpler and safer.

FILE PHOTO: A Royal Bank of Scotland branch in central London, Britain February 21, 2009. REUTERS/Luke MacGregor/File Photo

“This is an important moment for RBS,” McEwan, who has presided over the bank’s turnaround since 2013 and a series of key milestones in recent months, said in a statement.

Under former Chief Executive Fred Goodwin, RBS expanded rapidly from a small Scottish bank to become a global financial services group.

But a disastrous 2007 bid for Dutch bank ABN Amro was sealed just as the financial crisis hit, bringing the bank to the brink of collapse and forcing the government to step in.

Few argue that Britain’s Labour government of the time erred in rescuing the lender, but the years since have been marked by relentless restructuring and billions of dollars in fines to settle misconduct disputes which have hit the bank’s recovery efforts and the chances of returning taxpayers’ money.

A 2015 Rothschild report commissioned by former finance minister George Osborne found that 107.6 billion pounds in crisis-era bailouts, including funds injected into Lloyds Banking Group LLOY.L and failed lender Northern Rock, would bring a 14.3 billion pound return for the taxpayer.

But the report estimated a 7.2 billion pound overall loss on the government’s investment into RBS.

Successive governments have also faced criticism for a hands-off approach to RBS which has been embroiled in a series of scandals, including over its treatment of small businesses in the aftermath of the crisis.

The government is set to sell the rest of its 62 percent stake in RBS over the next few years, most likely in a similar fashion to Monday’s sale although it could offer some of the shares to the public.

Monday’s sale resumes a process the government began in 2015 when it sold a first tranche of RBS shares - 5.4 percent of its stake - for 330 pence per share, at a 1.1 billion pound loss.

Subsequent sales were put on hold pending the agreement of the multi-billion dollar settlement with the U.S. Department of Justice.