Taxpayer makes 'pure profit' from Lloyds selloff

wotsthat

http://www.bbc.co.uk/news/business-39671843

The £20.3bn spent bailing out Lloyds Banking Group during the financial crash has been re-paid in full, UK chancellor Philip Hammond has said.

Nine years after the government bought 43.4% of Lloyds, the taxpayer has now got slightly more - £20.4bn - back.

The government began selling off its stake to investors in 2013, with the final 2% likely to be sold this year.

..the government has also received £400m in share dividends from Lloyds as the group returned to health.

Good news but surely only half the story?

The taxpayer has been on the hook for guarantees and indemnities for nearly a decade. That isn't a zero cost affair.

RBS looks like a different kettle of fish and the taxpayer won't break-even on their shareholding. The state/ taxpayer shouldn't be in the business of owning banks or trying to time share sales - any loss can be added to the true cost of the banking crisis - time to sell up, move on and take the taxpayer off the hook.

antrobus

wotsthat wrote: »

...Good news but surely only half the story?

It does not take account of the cost of funding.

wotsthat wrote: »

...The taxpayer has been on the hook for guarantees and indemnities for nearly a decade. That isn't a zero cost affair....

Fees were charged for both the Special Liquidity Scheme and the Credit Guarantee Scheme. The NAO is of the opinion that the income generated by both fees and interest were "less than would be expected from a normal market investment" and so did not compensate the "taxpayer for the degree of risk accepted by taxpayers in providing the support". But since it appears that neither scheme actually involved any claims, this would be a national economic loss rather than an accounting loss.

https://www.nao.org.uk/highlights/taxpayer-support-for-uk-banks-faqs/

Both the above schemes closed in 2012. As at March 2016 there was only £9bn's worth of guarantees outstanding, which "solely relates to Northern Rock and Bradford & Bingley".

wotsthat wrote: »

...RBS looks like a different kettle of fish and the taxpayer won't break-even on their shareholding. The state/ taxpayer shouldn't be in the business of owning banks or trying to time share sales - any loss can be added to the true cost of the banking crisis - time to sell up, move on and take the taxpayer off the hook.

I believe that everyone is waiting to see (a) how much RBS will be fined by the US government and (b) whether RBS can cancel the Williams & Glyns project before making any decisions.

Thrugelmir

antrobus wrote: »

I believe that everyone is waiting to see (a) how much RBS will be fined by the US government and (b) whether RBS can cancel the Williams & Glyns project before making any decisions.

RBS is a shadow of the bank it was. Shrunken in size. Ten straight years of consecutive losses amounting to some £50 billion so far. With more likely to follow.

Remaining stake has already been written of £14.7 billion in the public accounts. So far £2.1 billion has been realised from share sales. Originally some £45 billion was pumped in.