Bank bailouts cost £950 a household

By Amaka Agwuegbo, with Agency report

UK Financial Investments Limited (UKFI), which manages public stakes in two banks, said every household had more than £3,000 invested in Lloyds and RBS shares.

But the £34.5bn currently invested shrunk to £23.6bn last month – a 32% paper loss of £10.9bn, equivalent to about £950 per household. The taxpayer is still deeply in the red despite a relative recovery in bank stocks in recent months. In February, the shares were showing losses of £18.1bn.

The figures came as UKFI published its first annual report and strategy for selling the public stakes in the ailing banks – although it warned an exit could take several years. The taxpayer currently owns 70% of RBS and 43% of Lloyds, but after extra shares are issued under a scheme to insure the banks’ toxic debts, this will rise to 84% and 62% respectively.

Acting UKFI chairman, Glen Moreno, said: “Make no mistake, this ain’t over yet. We are a long way away from normalcy in the world’s financial markets.” Mr Moreno said the body’s aim was to achieve “sound, prudent and profitable banks”, adding: “UKFI is not a short-term investor.”

Chief executive, John Kingman, the senior Treasury official who led negotiations with the banks over the rescue, said the public “rightly expected” to get their money back.

Mr Kingman said he could not “sensibly answer” questions over when the stakes would be sold, although the body was not “currently working” on any transactions.