In 2008, the U.K. government saved Royal Bank of Scotland with a £45.5 billion ($59 billion) bailout.  Taxpayers still own 73% of the bank, but the entire RBS stake is currently worth only about £15 billion.  Nearly a third of RBS’s market value has been wiped out since Brexit, more than any other major U.K. bank.

The British government plans to sell £25 billion of RBS shares in the next 4 years. But that is built on an optimistic assumption, give the low current valuation.   Yes, the U.K. government had its chances to cut its losses – as the age-old mantra of the securities industry goes - but the decision to sell was always postponed. 

RBS executives and investors have long argued the bank should be privately held, but the U.K. Treasury is now swamped by a bigger problem - negotiating the actual Brexit.  A plan to sell part of a 9% stake in Lloyds Bank is also on hold.  RBS’s reorganization and business strategies have been further sabotaged by long-standing rock-bottom interest rates.

With prospects looking bleak, the U.K. government may simply be forced to conduct liquidate RBS just to close this sorry chapter.