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RBS is back in the news, again, and not in a good way. Nine years ago high-flying RBS was about to buy the Dutch bank ABN Amro, in the process making itself (briefly) the biggest bank in the world. A year after that deal was concluded, RBS under Sir Fred Goodwin was bust and had to be saved by the British taxpayer.

One hears it said that the taxpayer made an “investment” of £45.2bn in the bank, when the government took ownership, which is not true. It was a desperate recapitalisation rescue operation at a point when the government feared civil unrest and the meltdown of the payments system on which the food supply network rests. Seriously.

Were there free market alternatives for a rescue when RBS had a balance sheet standing at a number several times the size of the UK economy and was about to topple over? Theoretically, yes, but not in practice at that moment. The banking crisis coming after a long period in which the government and City Establishment based policy on the bonkers end of boom and bust theory, there was no emergency plan in place. It was the equivalent of the lifeboats on the Titanic scenario. When the banks and the rest of us on board hit the iceberg, the government had to improvise at speed.

Years later, RBS is still struggling to recover. Today it has announced that it lost £2.04bn in the first half of this year. The business is trying to restructure itself – again – and has had to withdraw its existing plan to sell off the Williams & Glyn network of branches. Meanwhile, in a low interest rate environment it is struggling to make money.

Much as it might make frustrated taxpayers feel a little better, there is not much point sniping at the current team running the place. They are dealing for the most part with the consequences of decisions taken by the Goodwin-era management and by politicians in the years since. It was Goodwin and his team that went on a reckless expansion, growing too fast, lending too much and creating the worst British business smash since the bursting of the South Sea Bubble in 1720.

After 2008, successive governments – admittedly dealing with a difficult situation involving many moving parts – then made decisions that have with hindsight turned out to be mistakes. Stephen Hester, the first CEO after nationalisation, wanted as an investment banker to trade his way out of trouble (while also restructuring). The Tory government didn’t like his approach, because it involved paying people more money than the public could stand after the crisis. He was removed, at the Chancellor’s instigation, and replaced with Ross McEwan, a New Zealander. Simultaneously, post-crisis the chance was missed to go for a proper break-up of RBS, into several regional banks and other units. The compromise was the sale of Williams & Glyn, a fiddly exercise that has cost £1.5bn already and consumed the current management for years, all for the sale of dated branches which no-one really wants other than at a knockdown price.

In such circumstances, it should not be a shock that taxpayers will never recover their £45.2bn – it was clear several years ago that this was the case. After almost a decade, RBS is much smaller than when it was bought, and the recovery effort is nightmarishly difficult. The loss now would be of the order of £10bn to £15bn in the event of a full sale.

Now, as McEwan’s team battles to right the bank against the backdrop of Brexit, two other bombs under RBS need to be considered.

1) Litigation, fines and compensation: You’ll see this mentioned, usually in passing, every time RBS releases some news, but it is much more significant than it looks. In the UK, RBS is being taken on in a looming court case by shareholders who say they were misled when they invested in the Rights Issue undertaken by RBS in 2007. The evidence continues to mount, particularly in relation to how the CDO operation in the US was run and the way in which billions of dollars of toxic stuff on the books was optimistically “marked”, priced, in 2007 and 2008. Were the marks too high to protect the bonus pool before the crisis hit, thus giving investors a misleading impression of the bank’s health? Who knew what, and when? Talks have been convened recently to explore a settlement. In the US, RBS also awaits the outcome of a Department of Justice settlement on the mis-selling of mortgage-backed securities pre-2008. It is difficult to put a figure on where all this will end up. There are those who think five, six or seven billion might cover both settlements if RBS is lucky and the lawyers are good. Or the eventual number in the UK and US cases could in combination be much much higher. Think of the political and financial reaction when this crystallises.

2) The digital revolution: Big banks, even those without the challenges faced by RBS, are struggling to adapt to the digital revolution. I don’t just mean online banking, although big banks tend to be at a disadvantage because they have vast legacy computer systems that are patched together. This is a particular problem at RBS because Goodwin bought so many other units and bolted it all together, badly it turns out. Fintech – new platforms and technology being invented by start-ups in all aspects of retail and investment banking – is starting to eat some of the big global banks alive. Only the most nimble and adaptive will survive what is coming.

With all of this going on underneath the surface, British taxpayers should wish the RBS management the best of luck. They will need it.