There may have been no choice but to bail out and recapitalise the Royal Bank of Scotland eight years ago but there is no escaping the fact that having the Government as its main investor with a 71.3 per cent stake has been a shambles.
In spite of several leadership changes and strategy switches the bank is tomorrow expected to unveil its ninth consecutive loss and faces a string of hurdles to its recovery.
The hopelessness of driving repairs from Whitehall finally is starting to dawn at the Treasury.
It has been a matter of faith that it would be a political disaster for Government if it were to seek to place RBS shares in the market and take some of the £23billion or so of taxpayer losses on the chin.
Constrained: RBS boss Ross McEwan is doing his best but is hamstrung by the political anvil
But running a huge international bank from Whitehall, where every major decision has to be approved by ministers, is folly.
Former Chancellor George Osborne’s fall-out with former chief executive Stephen Hester, who had a track record of turning around failing banks, was a mistake.
Hester may have put too much faith in investment banking and been too concerned about his bonus, but no one could accuse him of being hesitant.
His successor, New Zealander Ross McEwan, is doing his best but is hamstrung by the political anvil.
Encouragingly there are indications from the Treasury that it recognises the problem and wants to get rid of its troublesome legacy.
Among the immediate problems is the failed effort to disgorge Williams & Glyn, which has gobbled up some £2.5billion of investor funds.
The other big ‘known unknown’ is the likely sum which it will have to pay to American regulators over the sub-prime mortgage debacle, with estimates at over £10bn.
The potential exposures including the continuing wrangles over the behaviour of RBS’s Global Restructuring Group can be quantified.
What we also know is that RBS has an enormous corporate, SME and retail franchise and banks’ customers are very sticky, staying with their lender through thick and thin. And as Lloyds is demonstrating see here can be light at the end of a dark tunnel.
As soon as the chance arose in America the US Treasury lost no time in disgorging the financial stakes it took on in the crisis, returning shares in debt insurer AIG, Citibank and others to the market at a loss.
This may not have gone down well on Main Street but in the end US taxpayers did get their money back and the financial sector there is roaring away.
At the right price there will always be buyers for marked-down assets, especially those that are publicly traded like RBS shares. Philip Hammond has the ideal opportunity in his budget on March 8 to signal a willingness to resume the selling down of RBS shares and absorb the slings and arrows.
Let the hosannas ring out. The decade-long nightmare at Lloyds, which was once Britain’s safest and most reliable bank, looks to be over.
Before anyone is moved to anoint the bank’s chief executive Antonio Horta-Osorio with laurels beyond his £5.5million pay cheque it is as well to reflect that with a dominant market share Lloyds ought to have a licence to print money.
Instead, it has been burning it with the £17billion payouts on PPI, among other sins.
Nevertheless, a profit of £4.2billion cannot be sniffed at and the long period of misery for shareholders, which began with the shotgun merger with HBOS in 2008, looks to be over.
Horta-Osorio has done a good job in clearing bad debts, securing its balance sheet and coming down hard on the cost-to-income ratio.
But he will find it difficult to shake off his image as the banker who cannot be trusted to behave with propriety when representing his group overseas.
Even unwanted takeovers have their uses. The view among investors is that Unilever chief Paul Polman might have been less threatened by a Kraft Heinz takeover if he didn’t spend so much time swanning around the world supporting trendy causes.
He is being forced back to brass tacks with a pledge to hit higher profit margins and a review of the enterprise by April. Nothing is being ruled out.
It should be careful. After Cadbury spun off its underperforming Schweppes soft drinks division it became more vulnerable to a bid, which duly arrived from Kraft.
The rest is history…