“Since the autumn of 2008, when the UK government took stakes in Royal Bank of Scotland and Lloyds Banking Group, its aim has been to sell these investments as quickly and profitably as possible.

“Not only have the banks been left under private-sector managers, answerable to profit-driven investors as well as the state; but even the Treasury’s own holdings have been managed at arm’s length by UK Financial Investments. This, it was felt, was the best way to deliver a swift recovery and exit.

“The departure of Jim O’Neil – UKFI’s third chief executive in four years – is a moment to reflect on the limited success this approach has achieved. With the exception of Northern Rock, which was returned to private hands last year, it has yielded neither exits nor markedly stronger banks.

“The state’s shareholding in RBS is worth barely half what the government paid for it. Even at Lloyds, which is in better shape, the government’s stake is underwater. Hopes for a swift sale of shares in either are fading.”

***

Read full Financial Times article here