You would have been forgiven for thinking the UK’s financial woes were over.
First Lloyds Banking Group weighed in with profits of £2.04 billion for the first three months of 2013 up from £280 million at the same juncture last year and then rival RBS posted an £826m return, the first quarterly profit it had made since 2011.
The figures were hailed as proof positive the banks, both of which required major bailouts from the UK Government during the height of the financial crisis, were on the right course.
There is no doubt that much progress has been made in cleaning up our major banking houses, but it struck me as more than a little premature for RBS chairman Sir Philip Hampton to raise the spectre of the bank returning to private hands.
Firstly, a recap of the facts.
In 2008, former Chancellor Alistair Darling who now spends his days trying to ensure the UK is not broken up by a Scottish independence vote found himself with no option but to step in to save RBS.
The ill-advised and ill-fated deal to buy ABN Amro had literally broken the bank, and only the UK Government’s emergency intervention which saw Mr Darling agree to plough £45bn of taxpayer cash into the ailing financial leviathan drove the wolves from the door and averted an unthinkable economic catastrophe.
There was no wriggle or thought room: Mr Darling and his Prime Minister Gordon Brown had to act immediately.
Their buy-in at more than 500p per share saved the day, but the value of the bank’s stock plummeted and the Government has been left facing huge paper losses.
The question ever since has been when will that money, which lest we forget belongs to you and me, ever be recouped?
In the public’s eye at least, Sir Philip’s intervention gave the first real sight of a timescale for return.
He said that RBS’s balance sheet had been “substantially fixed” by the massive post-Goodwin clean-up and said the UK Government could start selling off its 81% shareholding in the bank from the middle of next year, and possibly even sooner.
If they do, Mr Darling’s successor at No 11 Downing Street, George Osborne, is likely to get stung. Shares in RBS must climb not just by double digits but by triple figures to ensure a positive return on the Government’s investment.
Given the bank’s up and down share performance over the last few months it hit a year-to-date high of 367p in late January and has fallen to below 300p since it seems unlikely the requisite gains will be made in time for the start of re-privatisation to be a profitable exercise for the Government by summer next year.
If a week is a long time in politics, in banking terms a year these days is so far on the horizon that it is almost impossible to say what will happen.
But there is one thing I am sure of: neither the UK banking sector nor the wider economy has healed, and they won’t be all better by next year either.
Progress at our banks and in other sectors of the economy there were figures out last week showing a slight improvement in the services industry is great but should be reflected appropriately.
It will take time for things to fully turn around, and expectations of the pace of recovery should not be overplayed meantime.