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Analysts believe taxpayers will benefit from banking bailout

A number of prominent analysts in the UK have joined forces to suggest that the UK government could eventually make a profit of around £27 billion from the taxpayer-funded bailouts of Lloyds Bank and Royal Bank of Scotland. Even though it could take up to five years to crystallise the forecast profits on the massive investment but if indeed a £27 billion profit is crystallised then surely this would make the banking bailout worthwhile?

While at this stage, with no comment from the UK government, it is impossible to know exactly what the government is thinking and indeed when the UK government is looking to reduce or dispose of the entire shareholdings in Lloyds bank or Royal Bank of Scotland, it is likely to be sooner rather than later. There is also the question as to how the UK government will dispose of the shares, with a government backed share issue more than likely, as indeed a sale of the total holdings could put either one of the companies (or potentially both) "in play".

The last thing the UK government would want is for any potential bidder to use the tax payer stakes as a basis for a potentially hostile bid. It is likely the government will play its cards very close to its chest and possibly arrange a part disposal of the shareholdings before officially announcing its intention.

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