It is difficult to see how UK taxpayers can recover the costs of bailing out Royal Bank of Scotland (RBS) with the bank now set to become even further shrunken in stature. In its glory days, RBS was the world’s third largest bank by Tier 1 capital, according to The Banker’s Top 1000 ranking of July 2008. In last year’s ranking it had already fallen to 12thplace and with another downsizing on the way it will be heading much lower.
Of course, noone wants to own a huge bank that is failing and RBS, which needed a £45.5bn ($75bn) bail-out and is 81% owned by the UK taxpayer, made dreadful mistakes. More than five years later it is still losing money, and a loss of £7bn is forecast by analysts such as CreditSights for 2013.
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