Hamish McRae: Share price increase shows Lloyds Bank is healing – but only just

So the share price of Lloyds Bank has just about squeaked above the level where the taxpayers start to make a profit on our involuntary investment.

You have to play around a bit with the figures to claim even that, for though the Treasury claims we are square at anything above 61.5 pence, it actually paid an average price of more than 73 pence a share and the gap is covered by insurance charges the government earned from guaranteeing Lloyds' bad debts, guarantees that were never called. To be sensible you should also look at the funding costs of the government stake and the opportunity cost of what it might otherwise have done with its – or rather our – money. You would in any case want a pretty clear headroom above your selling price before you tried to place the shares back on the market.

So, a share sale is not imminent. The significance of the share price movement is something else. It is a symbol of healing. It has taken a long time but Lloyds has got to grips with most of the legacy problems from HBOS and in another year or so it will be possible to feel that this element of the banking crisis is over.

It will not be back to normal because the new normal in banking will be quite different – more cautious, more focused – than the old normal. But a line will have been passed and if taxpayers end up making a profit on the entire episode, which given the risk they were forced to take on, is as it should be.

The Royal Bank of Scotland tale is a more difficult one, as the share price shows. It is around 336p but needs to go above 500p to get us out ahead, though again you could allow for the debt insurance fees and say it was a bit lower. The stake is double the size – more than 80 per cent held by the taxpayer as opposed to 39 per cent – and you don't want to be in a hurry to sell given that overhang.

Sensibly, that sale should be three or four years off. In the end there is no reason why we taxpayers should not end up making a profit too.

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