The government has begun its sell-off of shares in part-nationalised lender Royal Bank of Scotland, raising £2.1bn, a third below the price it paid.
It sold a 5.4% stake at 330p a share, a 7.6p discount on Monday’s closing price.
Chancellor George Osborne is facing criticism for selling the shares at well below the price of about 500p the government paid for them.
The 170p difference represents a loss of about £1.07bn on the shares sold.
The government’s sale cuts the government’s stake in RBS to 73%.
The UK bailed out RBS in 2008 and 2009 by buying shares for £45bn and supplying it with cheap funds.
Ian Gordon, a banking analyst at Investec, told the BBC’s Today programme: “The taxpayer is being short-changed.”
The shares could have been sold for a higher price in February, when they were changing hands for more than 400p, he said.
However, James Bevan, chief investment officer at money manager CCLA Investment Management, said the loss was “relatively small”.