Taxpayer to make £27 billion profit from bank bailouts

Well, until they actually sell the shares, there is not one penny of profit. But even if these assumptions are accurate, £27billion is a poor return for the huge risk taken by the government (with our money).

When RBS and HBOS came cap in hand to the BoE/government, it became the lender of last resort. As anyone who has had the misfortune to have had to use the services of a loan shark will testify, lenders of last resort charge a very high rate of interest.

The government was right to bale out these banks but the conditions should have been much harder. A small percentage of bank profits over the next twenty years would go a long way to fund the government debt.

As the banks caused much of the national debt it is only right that they should pay the price of clearing it. I agree with Simon Taylor the banks would be and are utterly ruthless with their customers so I have no sympathy for them. They should pay the kind of price which will teach them the necessary lesson.

When the shares are sold, are they going into the open market?

When I see a profit for the Tax payer I will believe it, until then it is as speculative as the Banks very stupid negligence such as buying loan books without examining them or checking on repayment abilities of the borrowers.

Ernie,

You really don't believe that the banks will learn a lesson do you?

Give it ten years and something similar will happen again.

Banking is a dog eat dog situation, to survive you have to be ruthless, it's the nature of the job.

"At the heart of every banker there is a cold stone".

Oh dear, oh dear. what easy - and ill informed targets- banks are. in simple terms---

How did the banks get in a mess/ Why was there a need for a bailout- because the wholesale money markets dried up- why were the banks in the wholesale markets for so high a % of funds anyway- mainly supplied from abroad- because the country (ie the taxpayers) does not save enough- too much spend spend

Where was the lending going - to support the property market - ie taxpayers assets. If a house price goes from £100k to £300k in 10 years just by painting the bathroom- where do people think the money is coming from?- there has to be some outstanding financial conjuring to keep that trick going. Who benefitted from constantly rising house prices- the public ie taxpayers.

Taxpayers fingerprints are all over the country's current financial mess- aided and abetted by our inept politicians. The banks are just the fall guys who really had no option but to keep the lending spiral going - otherwise someone else would have and the would have been out of business. No turkey votes for Christmas.

We will never get out of this fix until we get house prices down to realistic levels enabling capital to be diverted to more productive use than funding taxpayers holidays through equity withdrawal.

why aren't banks lending to small businesses- too much capital tied up in housing- who owns the houses whose values are accordingly protected- oh yes- the taxpayer.

Perhaps we should get the taxpayer to pay the full cost of the mess their greed creasted!

The tax payer will have to wait till hell freezes over before seeing any return. In other words NEVER!!

This as has been said depends upon a share price advance( not a decline ) and when the Govt. decides to sell? But there are big vested interests out there. The Banks are likely to become increasingly profitable, with the prospect of dividends from 2012 . At the moment the big stock market players and hedge funds are happy to play the shares up and down and keep the price low. If they are sold to institutions at these levels they stand to make mega Bucks together with dividends to follow. Whoever arranges this sell transaction for HMG also makes Mega Bucks. Perhaps the Banks could buy back the shares with a more profitable return for HMG. The shares could then be cancelled. At the moment the biggest potential winners are the big Market Players who will continue to ensure the stock is undervalued, pending any disposal by HMG.

So will the Taxpayer get the full benefit of his Bailout, Wait and see-- your guess!

The only reason that the banks are so profitable is that they have massively increased interest rates on loans, overdrafts and credit cards whilst paying derisory rates on deposits. It is a disgrace but of course the government will not lift a finger to help the public because of the chaotic state of the public finances.

The Banks can't be blamed for everything, who was it that gorged on all the credit?

WE DID.

Agree with you Mr English on the ill informed comment!!! Please DO Refer to Prof Tim Congdon, an independent economist - he maintains the banks did not need the bailout and the way the Govt helped was inept - anyway ONLY TWO excluding bust NR took the help and one of those Lloyds had the Govt gun to their heads.

Banks have paid a huge amount of tax to the Govt and divs to fund our pensions BUT they will always be vulnerable to total panic - just look/study at their Balance Sheets and maybe light will dawn. Enough of this mindless crit of the banks!! Be thankful we have a strong banking sector and support them.

(I have never worked for a bank and am not defendding everything they do.)

absolute bollocks!

so all we need is for the banks to act criminally reckless, again and again and we all make a huge profit and live happily everafter.

Please don't insult us Deborah!

I also agree with Mr English. Popular as it may be with the ignorant to bash the bankers and other high earners with 50% + tax rates, when they move to Switzerland or wherever and pay 18% tax will those same ignoramuses be happy to plug the hole that this will leave in government income.

I have no connection with banking, but I recognise the enormous importance of a healthy financial sector to the future well-being of this country.

I lost a great deal thanks to the banking casino crisis. A number of small cap companies I had invested in went to the wall as they couldn't get help when they needed it most.

I will never get that money back but take comfort in the fact that the ordinary taxpayer wont see a penny from the possible £27 billion profit either. The only winners here are the financiers who managed to hang on to their jobs, give themselves a raise for doing so well at buying up shares in solid companies they had previously reduced to rock bottom prices. Nice if you have money left over to do it.

Spare a thought for the private investor who bought bank shares prior to the

credit crunch!

Twenty seven billion ponds profit from bailing the banks out! Golly! We have money to rearrange the map of the Middle East again now!

Mr English is right. Had the banks failed Blighty would have gone with it. Between Brown and the FSA they manged to cock things up so badly that there was no choice but to offer them a get out of jail card. But lets make things clear it was always going to be a loan and a loan that will be repaid with handsome interest if the FGSA and The Govt don't screw things up again. As for the muppets who still believe the banks got something for nothing just do the maths on how much revenue the financial sector generated during Brother Tony and Gorden's golden decade.

(gordOn joe)didnt he do well we will see a significant return to gov.coffers thanks to g brown esq..i note another patronising comment re. risk/reward from someone else who is still stuk with inside the box economics-get real!!!it had to be done like this and only one person had the vision . history will view it as such!!!!!!thank god the present mutt and geoff werent in charge or we would be in a mess! i know "were all in this together" ,but the people whove lost jobs and houses are more IN IT than those who may have to suffer the indignity of serving their dinner guests a cheaper brand of caviar!!!!!!!!!!

Tut tut wolfie ( cit smith) Mutt and Geoff are not the spectre we should be afraid of, its that well known dodgy movie star "Vince Cable"

bank customers should get varied discounts on the share sale by the government according ot their length of service.

Am I missing something here? To realise those share values, the shares have to be sold. Where does the money come from: either we cash in savings or sell other shares. But quantitative easing will have taken away much of the value of our money. How many of us want to buy shares at these values with our diminished savings, and presumably on the basis that the bank shares will therafter be secure and/ or out-perform the rest of the market?

I can't help thinking that I am being ripped off over and over again.

It'a all paper money, and one man's gain is another's loss. So the taxpayer's gain is at the expense of the other shareholders, including our pension funds.

Let us not keep falling into the trap of equating the greedy bankers who milked the banks with the remaining value of the banks. We want to stop the whole worldwise ethos of rewarding financial investment employees way above their ability, intelligence and qualifications. They could not earn this sort of money privately, but need the infrastructure of the bank and other peoples' money to make the returns. But they all claim that they are some kind of supermen and earn it !!! In reality they are just pretty ordinary mortals, and are no better than many who use their skills to keep vital industry going.

But this is a completely different issue from the corporate value of the banks

Mr English, in that he defends the banks and lays all of the problems at the door of the UK government, is wrong. Yes, Brown was part of the problem in his "light touch" ("no touch" in reality) regulation, but the UK banks led the charge in reckless lending and abusive behaviour. They simply lost their heads and, like the ratings agencies, stopped thinking with any moderation at all. Consider the determination with which Sir Fred Goodwin, against all common sense, took the final fatal step and acquired ABN Amro at a huge over-value with its overload of toxic subprime rubbish. Consider the wild expansion of Northern Rock and the wilful failure to halt the same at HBOS despite warnings from sane insiders who were being paid by the bank to warn them of such a danger. Have a look at Hansard Debates for 02 June 2009, and look at the exchanges concerning HBOS plc and the conduct of its Reading Corporate Division. "High risk" indeed for those unfortunate enough to deal with them.

What Mr English also blithely forgets is that banks and building societies, in their determination to sell product committed, in my view, obvious frauds. They routinely churned mortgage endowments which, in most jurisdictions in the USA, is regarded as fraud. Bit of a silence about its juridical nature in the UK. The FSA have made churning a breach of its Conduct of Business Rules, but there is no real sanction - the FOS redress for churning is a joke.The extent to which the banks sold wildly inappropriate payment protection policies to the most vulnerable is only now being realised. At the same time they rejoiced in the fact that computerisation enabled them to churn out automatic charges for the most insignificant of over-borrowings, which they ruthlessly collected. Against this background the truly obscene level of bonuses they then paid (and are still paying) to their employees is hard to swallow. As Jon properly points out bank staff are just ordinary people working in a set of circumstances in which, completely fortuitously, they cannot fail to make money.

A load of bunkum, particularly from Taylor.

The govt is earning 12% on the loans to the Banks and then they will get the profit from the shares.

Very short term memories. Where can you get a rate of 12% return on a loan nowadays?

The govt largely contributed to the problem by doing nothing in 04/05, the banks wanted interest and commission (bolstering the fabulous fantastical bonuses they would get) and the feckless borrowers all contributed to this, with the taxpayers initially suffering and now the savers paying for it.

No, the taxpayers are getting a very good return, as are the prudent borrowers (that the savers are underwriting0, and will ultimately do well, but never the savers.

Those that allowed this, all Zanuliebore should forfeit all benefits and pensions, as should the bankers who have paid back zilch of their bonuses.

Poor Deborah, the critics were kicking out when she said the banks were making massive profits, and now they are lashing out when they hear that the taxpayer may also reap the benifit. They are never satisfied. The government are not stupid, It was a risk but they knew they were on to a good thing. Everybody need a bank, call it RBS or the Chutney Bank if you like. If they failed it would have been a greater disaster for all of us. Where do you think your salary goes? (that tin box again) ? Into a bank, And do you thnk they are in business for peanuts? I worked (in maintenance) in a Bank and I'll tell yu this, the talk over the wire with business firms sounded like small change in tens and twentys, but it turned out they were talking in millions. is it any wonder they made a profit in hundereds of billions. So like the government when the price was low even I took some of my money out of my savings that were paying 0.01 % pa and bought shares in all the banks. So far they are not only paying me dividends but the poorest (RBS) is up 32% in 6 mths. Roll on the banks!