RBS bailout 'unlikely to be recouped' - BBC News
Chairman Sir Howard Davies says the bank was rescued to save the financial system, not as an investment.
Royal Bank of Scotland's chairman has admitted it is "unlikely" the government will get back all the £45.5bn pumped in to the bank.

Sir Howard Davies said restructuring costs, losses on loans and selling businesses meant RBS was valued at less than taxpayers paid for their stake.

"The focus on survival over a decade has had a cost," Sir Howard said.

"The bank was rescued to save the UK financial system from collapse, not as a financial investment," he said.

He said in a lecture looking back on the decade since the financial crisis that the government is "unlikely to recoup its investment in full".

Explaining why, he said the bank had lost £130bn over the 10 years since it was rescued - about four-and-a-half times the bank's current stock market value - and incurred restructuring costs of £15bn.

The bank had been required to meet state aid requirements from the European Commission by selling off businesses which "materially reduced RBS's market value", Sir Howard said.

It sold commodities business Sempra, a stake in payments system Worldpay, and insurance company Direct Line.

It was also required to sell a 5% share of small business lending by spinning off bank branches, but last year, the Commission accepted a plan to free the bank from its obligation to sell its Williams & Glyn division in return for alternative remedies.

"It seems clear that, in aggregate, the cost of these remedies to the bank and its shareholders was very much greater than could reasonably have been forecast at the time," said Sir Howard.

The £45,5bn of public money was a "massive commitment", he said, and RBS had now gone from being the biggest bank in the world to the 29th largest as it scaled back its business.

The taxpayer stake has been cut from just over 80% to 62.4%

The bank's shares are trading at about 245p and Sir Howard said the government's stake could fall further if the bank was able to use some of its surplus capital to buy back shares. "A smaller, less risky bank does not need the size of capital base it had in the past," said Sir Howard.

In November 2017, the government said it aimed to sell £15bn of RBS shares by 2023, selling off £3bn a year over five years.

A stake was sold in June this year at 271p a share, while in 2015, a 5.4% stake was sold at a price of 330p a share.