Bottom Line: Taxpayer won’t ever be in profit
ROSS McEwan chose the word “sobering” yesterday to sum up the catastrophic £8bn loss RBS posted for 2013, taking its total losses since its 2008 bailout to £45bn. The figure will certainly be sobering for the government, which pumped the same amount into the bank six years ago in return for an 81 per cent stake.
With any privatisation still years away, and RBS shrinking its business even further, there is no longer any hope left that UK taxpayers will ever make a profit on their stake. After yesterday’s sell-off, the bank’s market cap is now just £39bn – well below the £46bn that was spent even before you account for inflation. McEwan’s vow to streamline the bank and slash its seven divisions to just three will shrink that number even further, with no guarantee it won’t face more penalties from the ongoing probe into forex rates. The bank itself may well return to profit by 2017-18. But it will have spent so much getting there, and be so much smaller, that the chances of any return on the government’s investment have now disappeared.