Taxpayers should not see RBS bailout as an investment nor expect money back, says bank’s chair

Sir Howard Davies, the chairman of the Royal Bank of Scotland, has used an event to mark the tenth anniversary of the crisis that saw the Edinburgh-based lender bailed-out at a record cost of £45 billion to the UK taxpayer, to concede that the public is “very unlikey” to recoup the massive capital injection.

The government came in for strong criticism earlier this year when The Treasury sold a 7.7 per cent stake in the bank at a loss of over £2bn.

Since its rescue when it was one of the world’s biggest banks, the past decade has seen RBS lose almost £130bn and shrink back to become a largely UK-orientated retail and business lender.

Sir Howard said yesterday: “The bank was rescued to save the UK financial system from collapse, not as a financial investment.”

He explained: “The government had little choice but to take the route it did, given the little time it had to act and the scale of funds required.”

The government spent £45bn bailing out RBS at the height of the crisis, and still controls more than 60 per cent of the bank.

Sir Howard added that the timing and pace of further share sales was a decision for the government, but echoed earlier suggestions from RBS chief executive Ross McEwan that the bank could help speed up the sell down by using some of its surplus capital to buy back government shares.

“To do so would require shareholder approval, but the logic is clear”, he added.