With the exception of the initial £45bn bailout of Royal Bank of Scotland in 2008, most political decisions taken by the Government on the future shape of the lender have been wrong.
Successive governments have been so scared of being shot down in the Commons for losing taxpayer money or making excessive bonus payments, they allowed RBS to become an albatross.
As a result, after nine years of public ownership and a decade of bottom line losses, we, the taxpayers, still own 72 per cent of shares and are being made to hang around while the US Department of Justice (DoJ), now under Trump command, decides how hard to beat up the bank over its role in the mortgage securities scandal.
Any port in a storm: Taxpayers still own 72 per cent of Royal Bank of Scotland shares
Admittedly the Treasury has been helpful in digging RBS out a hole over the European Commission demand that it disgorge the so-called Williams & Glyn branches through the curious device of a fund to assist challenger banks. Chancellor Philip Hammond should also be alert to the next danger on the horizon. Unless the Government shows initiative and rapidly sells down the RBS stake, the bank could become caught in Jeremy Corbyn’s net, be fully nationalised and a burden on the state for decades to come.
Doggedly under the leadership of New Zealander Ross McEwan, RBS has been sorting legacy problems. Complaints about the ruthless way the bank dealt with corporate clients of the Global Restructuring Group linger and it remains a stain.
But the scale of the misdeeds should not be a bar to selling more shares.
RBS is cutting costs, and operating profits in the third quarter jumped to £871m. McEwan is also making sure that unsecured lending is restrained and concentrating on being competitive in the mortgage market.
It also stands to benefit enormously from the endowment effect of higher interest rates should they go up next week. The main obstacle to placing more shares in the market is the DoJ and the uncertainty over the scale of the fines.
RBS has put £3bn to one side to cover the fines but some estimates suggest the ultimate penalties could be three or four times that. So until that is resolved conventional wisdom is that paying a dividend and selling the shares is verboten.
Why? The operating profits of the bank have been restored, it has a decent capital cushion, the global markets/investment banking operation is going well. You only have to cast an eye across the Atlantic to see which way bank valuations are going.
There is nothing sacrosanct about dividends. Warren Buffett rarely offers one and Amazon is more interested in ploughing funds back into the company rather than distributing income. The Government should end the waiting, confound the naysayers and start placing shares.
Among the more ridiculous scare stories about Brexit is that failure to secure a deal will ground British carriers across Europe and leave 900m customers stranded.
Cobblers. As Willie Walsh, chief executive of BA owner International Airlines Group, points out: ‘Whatever the outcome we will manage it without difficulty.’ This is not to say all that BA does is handled well, as passengers stranded by the late May bank holiday computer meltdown would testify.
But with its clout in Europe through Iberia and Air Lingus, together with the importance of BA to intra-Europe holiday traffic, it is hard to see Britain’s flag carrier grounded. Strong demand for travel together with lower jet fuel cost could see IAG turn in profits of £2.7bn this year.
That does not mean Walsh is resting on his laurels. BA has ambitions to pick up Monarch slots from Airport Co-ordination Limited or KPMG, which is handling the insolvency. There is also a strong belief that the Lufthansa purchase of Air Berlin/Niki could be uncompetitive and the European Commission should intervene.
That may be a long shot but IAG is not done yet in its desire to expand.
Back to dividends.
Chief executive Emma Walmsley and GlaxoSmithKline shares are being punished by fears that by investing in core pharma and bulking up consumer healthcare the payout to investors will be risked.
The current yield of 5.8 per cent may be a lure to income funds. But GSK investors need to forget the sugar rush and give Walmsley the headroom necessary to make opportunistic deals and think longer-term.