How do you sell a share when even the top analysts can't really value it? That is the problem facing UK Financial Investments, which oversees our stakes in Lloyds and RBS.
In addition to gloomy prospects, UK banks face two major uncertainties: how the Government will implement the Independent Commission on Banking's recommendations; and how much capital regulators will tell them to hold. Until these are resolved a sale of any of the Government's stakes is impossible.
RBS is likely to see the first sale. For a company of its size the stock is very illiquid – because taxpayers own 83 per cent of the bank. Average daily turnover is less than a quarter of HSBC's and about a third of Lloyds'. So it might serve UKFI to get more stock into the hands of solid institutions quickly, even if that meant taking a small loss.
These banks' shares also touched their current lows in 2009 and 2010. If the eurozone sorts its problems and the UK avoids a "double dip" who knows, UKFI could even test the water in a year or so. The City's bonus boys might also give this year's payments to Children in Need. Don't expect a sale until late 2013. At the earliest.